SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F/A

¨		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2004

OR

¨		TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM             TO

COMMISSION FILE NUMBER: 001-14736

Publicis Groupe S.A.

N/A (Translation of Registrant’s name into English)		133, AVENUE DES CHAMPS-ELYSÉES 75008 PARIS France (Address of principal executive offices)		REPUBLIC OF FRANCE (Jurisdiction of incorporation or organization)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class:		Name of Each Exchange on Which Registered:
Ordinary shares, nominal value € 0.40 per share, represented by American Depositary Shares (as evidenced by American Depositary Receipts), each American Depositary Share representing one share		The New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: Equity Warrants and ORANEs

     Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

Ordinary shares, nominal value € 0.40 per share		182,415,932 (1)
(title of class)		(number of ordinary shares)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes þ No ¨

     Indicate by check mark which financial statement item the registrant has elected to follow: Item 17 ¨ Item 18 þ

     (1) Excluding 13,065,009 ordinary shares held in treasury.

 

 

FORWARD-LOOKING STATEMENTS

     We make some forward-looking statements in this annual report. When we use the words “aim(s),” “expect(s),” “feel(s),” “will,” “may,” “believe(s),” “anticipate(s)” and similar expressions in this annual report, we are intending to identify those statements as forward-looking. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this annual report. Other than in connection with applicable securities laws, we undertake no obligation to publish revised forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events. We urge you to review and consider the various disclosures we make concerning the factors that may affect our business carefully, including the disclosures made under “Key Information — Risk Factors,” “Operating and Financial Review and Prospects,” and “Quantitative and Qualitative Disclosures About Market Risk.” Unless otherwise indicated, information and statistics presented in this document regarding market trends and our market share relative to our competitors are based on our own research and various publicly available sources.

EXPLANATORY NOTE

     Publicis Groupe S.A. (“Publicis”) is filing this amendment to its Form 20-F for the year ended December 31, 2004 in order to provide a new accountant’s report on its financial statements for that year by Ernst & Young Audit (“E&Y”). The original Form 20-F filed on June 24, 2005 contained a report on the financial statements signed jointly by E&Y and Mazars & Guérard (“Mazars”), in accordance with a provision of French law that requires that a publicly reporting company have two auditors for its financial statements. Following the filing of the Form 20-F, Publicis became aware of an issue regarding the independence of Mazars for purposes of the 2004 audit. The issue arises from discussions that were held during the conduct of the 2004 audit between Publicis and a Mazars partner working on the 2004 audit concerning potential employment of the partner with a U.S. subsidiary of Publicis. These discussions were subsequently terminated, and the Mazars partner in question will not be employed by Publicis and will not participate in the 2005 audit of Publicis, which will be conducted jointly by E&Y and Mazars.

     At the direction of the audit committee of its supervisory board, Publicis brought this situation to the attention of the staff of the U.S. Securities and Exchange Commission (the “SEC”). Following discussions with the staff, the audit committee engaged E&Y to render an audit report as sole auditor on the 2004 financial statements of Publicis for filing with the SEC. The audit did not result in any adjustments to the 2004 financial statements of Publicis.

     Separately, in December 2005, Publicis re-evaluated its determination of operating segments in accordance with U.S. GAAP and, as a result of the revised operating segment analysis, determined that it has eight reporting units for purposes of testing for impairment of goodwill under U.S. GAAP. Consistent with the new determination of reporting units, the testing of goodwill is performed at the level of the brands. Application of the new determination resulted in an impairment of goodwill of approximately € 847 million in 2003, primarily related to the incremental goodwill recognized under U.S. GAAP upon the acquisition of Bcom3 Group, Inc.

This incremental goodwill arises from the difference between U.S. and French accounting rules. Under U.S. GAAP, the purchase price of Bcom3 was determined by reference to Publicis’ stock price at the date the acquisition was announced on March 7, 2002 (€ 36.4), whereas under French GAAP the price was determined by reference to the stock price at the date the acquisition closed on September 24, 2002 (€ 17.6). The difference between the two share prices (€ 36.4 — € 17.6) resulted in € 1.7 billion of incremental goodwill under U.S. GAAP. Testing for goodwill impairment with eight reporting units without combining internally developed activities and purchased brands resulted in the above-mentioned goodwill impairment in 2003. In addition, in connection with the revision of its impairment analysis, the Company also determined that certain of the incremental goodwill recognized under U.S. GAAP related to the Bcom3 and Saatchi & Saatchi acquisitions should have been recorded in the functional currency of the related entity. Accordingly, the restatement of our historical financial statements reflects the revised impairment testing for goodwill as well as adjustments related to the effects of changes in foreign currency on our historical goodwill and intangible assets balances. For additional information regarding these restatements, refer to Item 5, “Operating and Financial Review and Prospects” and Note 31 to our consolidated financial statements.

     None of the aforementioned effects has an impact on the primary consolidated financial statements prepared in accordance with accounting principles generally accepted in France (“French GAAP”) for periods ended December 31, 2002, 2003 and 2004.

     This amendment amends and restates the following Items of Publicis Groupe S.A. Form 20-F:

	•		Item 3 “Key Information”
	•		Item 5 “Operating and Financial Review and Prospects”
	•		Item 6 “Directors, Senior Management and Employees”
	•		Item 7 “Major Shareholders and Related Party Transactions”
	•		Item 18 “Financial Statements”

     E&Y and Mazars delivered its report on December 23, 2005 on the 2002 and 2003 consolidated financial statements. E&Y delivered its report on December 23, 2005 on the 2004 consolidated financial statements.

     The filing of this Annual Report on Form 20-F/A should not be understood to mean that all statements contained in this document are true or complete as of any date subsequent to June 24, 2005. You should not consider this amendment to be a reaffirmation or reiteration of any forward looking statements from the original filing that may be reproduced in this amendment.

TABLE OF CONTENTS

				Page
Item 1:		Identity of Directors, Senior Management and Advisers			1
Item 2:		Offer Statistics and Expected Timetable			1
Item 3:		Key Information			1
Item 4:		Information on the Company			7
Item 4A:		Unresolved Staff Comments			24
Item 5:		Operating and Financial Review and Prospects			24
Item 6:		Directors, Senior Management and Employees			54
Item 7:		Major Shareholders and Related Party Transactions			70
Item 8:		Financial Information			72
Item 9:		The Offer and Listing			73
Item 10:		Additional Information			74
Item 11:		Quantitative and Qualitative Disclosures About Market Risk			93
Item 12:		Description of Securities Other Than Equity Securities			96
Item 13:		Defaults, Dividend Arrearages and Delinquencies			97
Item 14:		Material Modifications to the Rights of Security Holders and Use of Proceeds			97
Item 15:		Controls and Procedures			97
Item 16A:		Audit Committee Financial Expert			97
Item 16B:		Code of Ethics			97
Item 16C:		Principal Accountant Fees and Services			97
Item 16D:		Exemptions from the Listing Standards for Audit Committees			99
Item 16E:		Purchases of Equity Securities by the Issuer and Affiliated Purchasers			99
Item 18:		Financial Statements			100
Item 19:		Exhibits			102
EX-4.8: AGREEMENT DATED 11-3-05
EX-4.9: AGREEMENT DATED 11-3-05
EX-4.10: ANNUITY AGREEMENT
EX-99.1: CERTIFICATION
EX-99.2: CERTIFICATION
EX-99.3: CERTIFICATION

PART I

Item 1. Identity of Directors, Senior Management and Advisers

     Not applicable.

Item 2. Offer Statistics and Expected Timetable

     Not applicable.

Item 3. Key Information

SELECTED FINANCIAL DATA

     The following table sets forth selected consolidated financial data of our company and should be read in conjunction with our financial statements and the information provided under “Operating and Financial Review and Prospects” and “— Risk Factors.” The selected financial data presented below have been prepared on a basis consistent with that used in our consolidated financial statements. Prior years have been restated as necessary for a consistent presentation. Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in France (“French GAAP”), which differ in certain significant respects from accounting principles generally accepted in the U.S. (“U.S. GAAP”). See note 31 to our consolidated financial statements for (i) a discussion of the principal differences between French GAAP and U.S. GAAP as they relate to us and (ii) a reconciliation to U.S. GAAP of our consolidated net income and consolidated shareholders’ equity as calculated under French GAAP.

		Year Ended December 31,
		2004				2003				2002(3)				2001				2000(2)
		(In Millions of Euros, Except Per Share Data)
Income Statement Data
Amounts in accordance with French GAAP
Revenue			3,825				3,863				2,926				2,434				1,770
Operating income			438				522				405				327				275
Group net income			210				150				147				151				128
Basic earnings per share(1)			1.15				0.82				0.99				1.09				1.18
Diluted earnings per share(1)(4)			0.97				0.75				0.97				1.08				1.15
Dividends per share			0.30				0.26				0.24				0.22				0.20
Balance sheet data
Tangible and Intangible assets, net			3,772				4,486				4,637				1,618				1,303
Total assets			9,721				10,881				10,978				4,896				4,130
Bank borrowings and overdrafts (Short term and long term)			1,960				3,188				2,762				1,069				901
Shareholders’ equity			881				726				1,501				283				299

		Year Ended December 31,
		2004				2003				2002(3)				2001				2000(2)
		(Restated)				(Restated)				(Restated)				(Restated)				(Restated)
		(In Millions of Euros, Except Per Share Data)
Income statement Data
Amounts in accordance with U.S. GAAP
Revenue			3,825				3,863				2,969				2,434				1,770
Operating income			402				(498	)			353				(466	)			185
Group net income			346				(690	)			(13	)			(647	)			34
Basic earnings per share (1)			1.90				(3.77	)			(0.09	)			(4.76	)			0.31
Diluted earnings per share (1) (4)			1.38				(3.77	)			(0.09	)			(4.76	)			0.31
Balance sheet data
Tangible and intangible assets, net			6,364				6,987				8,162				3,789				4,233
Total assets			12,145				13,222				14,276				6,931				7,060
Bank borrowings and overdrafts (short term and long term)			2,911				3,975				3,540				1,052				901
Shareholders’ equity			2,484				2,384				3,755				1,866				2,582

EXCHANGE RATE INFORMATION

     Share capital in our company is represented by ordinary shares with a nominal value of € 0.40 per share (hereinafter generally referred to as “our shares”). Our shares are denominated in euros. Because we intend to pay cash dividends denominated in euros, exchange rate fluctuations will affect the U.S. dollar amounts that shareholders will receive on conversion of dividends from euros to dollars.

     The following table shows the euro/U.S. dollar exchange rate for 2000 through December 15, 2005 based on the noon buying rate expressed in euros per dollar. For information regarding the effect of currency fluctuations on our results of operations, see “Operating and Financial Review and Prospects.”

				Average
		Period End		Rate(1)		High		Low
December, 2005 (through December 15)		1.20		1.18		1.20		1.17
November, 2005		1.18		1.18		1.20		1.17
October, 2005		1.20		1.20		1.21		1.19
September, 2005		1.20		1.23		1.25		1.20
August, 2005		1.22		1.23		1.25		1.22
July, 2005		1.21		1.20		1.22		1.19
June, 2005		1.21		1.22		1.23		1.21
2004		1.36		1.24		1.36		1.18
2003		1.26		1.14		1.26		1.03
2002		1.05		1.02		1.05		0.99
2001		0.89		0.89		0.95		0.84
2000		0.94		0.92		1.03		0.83

RISK FACTORS

     You should carefully consider the risk factors described below in addition to the other information presented in this annual report.

We may have difficulty competing in the highly competitive advertising and communications industry

     The advertising and communications industry is highly competitive, and we expect it to remain so. Our competitors in the advertising and communications business run the gamut from large multinational marketing and communications companies to smaller agencies that operate only in local or regional markets. New competitors also include systems integrators, database marketing and modeling companies and telemarketers offering technological solutions to marketing and communications issues faced by clients. We must compete with these companies and agencies to maintain existing client relationships and to obtain new clients and assignments. Some clients require us to compete for business at mandatory periodic intervals. Client conflicts can, from time to time, give our competitors opportunities to seek business from our clients.

We may be adversely affected by unfavorable economic conditions in the markets in which we operate

     The advertising and communications industry is subject to downturns corresponding to those in general economic conditions and changes in client business and marketing budgets. Because some clients have responded, and may respond in the future, to general economic downturns by reducing their marketing budgets in order to meet earnings goals, downturns can be more severe in the advertising and communications industry than in other industries. For this reason, our prospects, business, financial condition and results of operations may be materially adversely affected by continuing unfavorable general economic conditions, or a further downturn in those conditions, in one or more markets and related changes in clients’ marketing budgets.

We may not be successful in identifying appropriate acquisition candidates or investment opportunities, completing acquisitions or investments on satisfactory terms or integrating newly acquired companies

     Our business strategy includes enhancing the range of our existing advertising and communications capabilities. We intend to implement this strategy in part by making acquisitions and other investments. We may not be successful in identifying appropriate acquisition candidates or investment opportunities or consummating acquisitions or investments on terms satisfactory to us. In addition, we may not succeed in integrating any newly acquired companies into our existing operations in a way that produces the synergies or other benefits we hope to achieve. Furthermore, we may use our shares as consideration in future acquisitions and investments, which could result in dilution to existing shareholders.

We are exposed to a number of risks from operating in developing countries

     We conduct business in various developing countries around the world. The risks associated with conducting business in developing countries can include slower payment of invoices, nationalization, social, political and economic instability, increased currency exchange

risk and currency repatriation restrictions, among other risks. We may not be able to insure or hedge against these risks. In addition, commercial laws in many of these countries can be vague, arbitrary, contradictory, inconsistently administered and retroactively applied. It is, therefore, difficult for us to determine with certainty at all times the exact requirements of these laws. If we are deemed not to be in compliance with applicable laws in developing countries in which we conduct business, our prospects, business and results of operations could be harmed and our financial condition could be weakened.

We are exposed to potential liabilities, including liabilities arising from allegations that our clients’ advertising claims are false or misleading or that our clients’ products are defective

     From time to time, we may be, or may be joined as, a defendant in litigation brought against our clients by third parties, including our clients’ competitors, governmental or regulatory authorities or consumers. These actions could involve claims alleging that:

	•		advertising claims made with respect to our clients’ products or services are false, deceptive or misleading;
	•		our clients’ products are defective or injurious; or
	•		marketing and communications materials created for our clients infringe on the proprietary rights of third parties.

     The damages, costs, expenses or attorneys’ fees arising from any of these claims could have an adverse effect on our prospects, business, results of operations and financial condition to the extent that we are not adequately insured and are not indemnified against them by clients. In addition, our contracts with clients generally require us to indemnify clients against claims brought by competitors or others claiming that our advertisements or other communications infringe upon their intellectual property rights.

Our ability to maintain our competitive position depends on retaining the services of our management and attracting and retaining other key employees

     The loss of the services of key members of our management could harm our business and results of operations. In addition, our success has been, and is expected to continue to be, highly dependent upon the skills of our creative, research, media and account personnel and practice group specialists, and their relationships with our clients. If we are unable to continue to attract and retain additional key personnel, or if we are unable to retain and motivate our existing key personnel, our prospects, business, financial condition and results of operations could be materially adversely affected.

We receive a significant percentage of our revenue from large clients

     A significant reduction in the advertising and communications spending by, or the loss of one or more of, our largest clients could weaken our financial condition and cause our business and results of operations to suffer. Our major clients may not continue to use our services to the same extent, or at all, in the future. Clients can typically cancel contracts with their advertising

agencies on 90 to 180 days’ notice. In addition, clients generally are able to reduce advertising and communications spending or cancel projects at any time for any reason.

Currency exchange rate fluctuations may negatively affect our financial results, the price of our shares and the value of dividends received by holders of our American Depositary Shares

     We hold assets and liabilities, earn income and pay expenses of our subsidiaries in a variety of currencies. Our consolidated financial statements are presented in euros. Therefore, when we prepare our consolidated financial statements, we must translate our assets, liabilities, income and expenses in currencies other than the euro into euros at then-applicable exchange rates. Consequently, increases and decreases in the value of the euro will affect the value of these items in our consolidated financial statements, even if their value has not changed in their original currency. In this regard, an increase in the value of the euro relative to other currencies may result in a decline in the reported value, in euros, of our interests held in those currencies. To the extent this has a negative effect on our financial condition as presented in our consolidated financial statements, it could cause the price of our shares to decline. Conversely, if the relative value of the euro to the U.S. dollar declines, the U.S. dollar equivalent of cash dividends paid in euros on our American Depositary Shares (“ADSs”) will decline as well.

The ability of holders of our ADSs to influence the governance of our company may be limited

     Holders of our ADSs may not have the same ability to influence the governance of our company as shareholders in some U.S. companies would. For example, holders of our ADSs may not receive voting materials in time to ensure that they can instruct the depositary to vote their shares. In addition, the depositary’s liability to holders of our ADSs for failing to carry out voting instructions or for the manner of carrying out voting instructions is limited by contract.

Some provisions of French law and our statuts (bylaws) could have anti-takeover effects

     French law requires any person who acquires more than 5%, 10%, 20%, one-third, one-half or two-thirds of our outstanding shares or voting rights to inform us within 15 days of crossing the threshold percentage. A person acquiring more than 10% or 20% of our share capital or voting rights must include in the report a statement of the person’s intentions relating to future acquisitions or participation in the management of our company for the following 12-month period. Shareholders who fail to comply with this requirement may be deprived of voting rights for a period of up to five years and may, in some cases, be subject to criminal fines. In addition, our statuts (bylaws) provides double voting rights for shares owned by the same shareholder in registered form for at least two years. Our statuts further provide that any person who acquires or disposes of more than 1% of our outstanding shares or voting rights must inform us within 15 days of crossing the threshold percentage and that we may require a corporate entity holding shares representing more than 2.5% of our share capital or voting rights to disclose to us the identity of all persons holding, directly or indirectly, more than one-third of the share capital or voting rights of that entity. Shareholders who fail to comply with these requirements may be deprived of voting rights. Finally, our shareholders have authorized our management board to increase our capital in response to a third-party tender offer for our shares. These circumstances

could have the effect of discouraging or preventing a change in control of our company without the consent of our current management. Giving effect to the provision of our statuts that gives double voting rights to shares owned by the same shareholder in registered form for at least two years, we estimate that the chairperson of our supervisory board, Ms. Elisabeth Badinter, owns 17.2% of the voting power of our company.

We are subject to corporate disclosure standards that are less demanding than those applicable to some U.S. companies

     As a foreign private issuer, we are not required to comply with the notice and disclosure requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), relating to the solicitation of proxies for shareholders’ meetings. Although we are subject to the periodic reporting requirements of the Exchange Act, the periodic disclosure required of non-U.S. issuers under the Exchange Act is more limited than the periodic disclosure required of U.S. issuers. Therefore, there may be less publicly available information about our company than is regularly published by or about other public companies in the U.S.

We will be obligated to adopt new accounting standards in 2005 that may have a material impact on our accounts and may render a comparison between financial periods more difficult

     In June 2002, the European Union (the “EU”) adopted new regulations requiring all listed EU companies, including us, to apply International Financial Reporting Standards (“IFRS”) (previously known as International Accounting Standards or “IAS”) in their financial statements from January 1, 2005. The IFRS may have a material impact on important items in our consolidated financial statements. For further information on the impact of IFRS norms, see “Operating and Financial Review and Prospects — Move to IFRS Accounting Standards.”

Item 4. Information on the Company

HISTORY AND DEVELOPMENT OF THE COMPANY

     The legal name of our company is Publicis Groupe S.A. and its commercial name is Publicis. Our company is a société anonyme, a form of corporation. It was incorporated in 1938, pursuant to the French commercial code, for a term of 99 years. Our registered office is located at 133, avenue des Champs-Elysées, 75008 Paris, France, and the phone number of that office is 33 1 44 43 70 00.

Historical Background

     Our company was founded in 1926 by Marcel Bleustein-Blanchet, known as the “father of modern advertising in France” and the “David Ogilvy of French advertising” because of his drive for innovation, his creativity in developing successful campaigns for clients and the new standards of excellence he set. Among his early innovations was the use of radio for advertising. In 1934, due to a ban on advertising on France’s government-owned radio stations, he created Radio Cité, the country’s first private station. He launched Régie Presse, a subsidiary dedicated to the sale of advertising space in the press, in 1937.

     When the Second World War began, Mr. Bleustein-Blanchet decided to shut down both our company and Radio Cité. We reopened in 1946 and won our first major post-war client, Colgate Palmolive, a year later. Through Régie Presse, we also expanded into the sale of media space in mass transit systems. Realizing the importance of monitoring consumer habits and expectations, Mr. Bleustein-Blanchet established a market research unit as part of our company. Our expansion continued in the 1940’s and 50’s in other ways as well. Nestlé became a client in 1952; Shell joined us in 1954. We moved our headquarters to its current location on the Champs-Elysées in Paris in 1957.

     Our reputation for innovation was strengthened in 1968 when we created the first television advertising campaign in France. Also in 1968, we provided communications advice to Saint Gobain in its successful defense of a hostile takeover attempt by BSN, the first hostile takeover bid in French business history. Clients won in the 1960’s included Renault and L’Oréal.

     We became a public company in 1970. In 1972, our headquarters building was destroyed by fire and we had to rebuild it. We began pursuing a strategy of expansion in Europe through acquisitions the same year, purchasing the Intermarco network in the Netherlands (with offices in Belgium, Germany, Scandinavia, Italy and Spain) and Farner in Switzerland (with offices in Germany and Austria). By 1974, we were present in 14 European countries. We made our first inroads in interactive communications in this period with the founding of SGIP, since renamed Publicis Technology. Our current chief executive officer, Maurice Lévy, joined our company in 1971 and became chief operating officer of Publicis Conseil in 1976. In 1978, our European expansion continued through our acquisition of the McCormick agency, a well-known U.K. firm.

     In 1981, we opened our first New York office. In 1984, we regrouped our network, then present in 23 countries, under the “Publicis” name. We founded our media buying subsidiary Optimedia in 1987, and it began operations in France, the U.K. and Switzerland. Also in 1987, Maurice Lévy became our chief executive officer and president of our management board. We entered into a major strategic alliance with U.S.-based Foote, Cone & Belding Communications (“FCB”) in 1988. We merged our operations in Europe with those of FCB, thus becoming the leading advertising network in Europe. We managed the combined European operations, making substantial investments in developing them, particularly in Spain and Italy. Through FCB, we also raised our profile among corporations in the U.S. In 1989, we began expanding into eastern Europe. The same year, we won Whirlpool’s worldwide account and launched a European direct marketing network, since renamed Publicis Dialog.

     Our expansion accelerated in the 1990’s. We created BMZ, a new network operating in Germany, France, the U.K., Belgium, the Netherlands and Italy, in 1992. The next year we acquired FCA, the fourth largest communications group in France. We then merged FCA and BMZ to create FCA!BMZ, a subsidiary with operations in 12 European countries. In 1994, we merged our New York office with Bloom, a U.S. subsidiary of FCA, as part of an effort to further increase our presence in the U.S. Coca-Cola became a client in 1994. We discontinued our alliance with FCB in 1995 due to strategic differences with its parent company, True North Communications, Inc.

     Mr. Bleustein-Blanchet died in 1996, and Elisabeth Badinter, Mr. Bleustein-Blanchet’s daughter, succeeded him as chair of the supervisory board.

     We began our expansion outside of Europe and the U.S. in 1996, acquiring operations in Mexico, Brazil and Canada. Over the next three years, we built an impressive international network with a string of acquisitions in eastern Europe, the Middle East, Latin America and the Asia/Pacific region. We also expanded in the U.S. during this period, acquiring Hal Riney & Partners and EvansGroup in 1998 and a 49% interest in Burrell Communications in 1999. At the beginning of 2000, we had operations in 130 locations in 76 countries and ranked tenth worldwide among communications groups.

     The last five years have seen continued pursuit of our expansion strategy. We acquired all of the controlling interests in a number of major U.S. agencies in 2000, including the Fallon Group and Frankel & Company, thus becoming a major competitor in the U.S. market. We dramatically increased the size of our operations in 2000 with the acquisition of Saatchi & Saatchi plc. In addition, in 2000 we became one of the world’s leading healthcare communications companies as a result of our acquisition of Nelson Communications. Reflecting our increasingly international focus, our shares, represented by ADSs, began trading on the New York Stock Exchange in 2000.

     In 2001, we created the world’s third-largest media consultancy and buying group by combining our wholly owned subsidiary Optimedia with Zenith Media, a firm we held jointly with Cordiant Communications Group plc. Upon completion of the transaction, we held a 75% interest in the resulting entity, ZenithOptimedia Group.

     In September 2002, we acquired Bcom3 Group, Inc. (“Bcom3”), creating the fourth-largest advertising and communications firm in the world, with annual revenue in 2002 of approximately $4.8 billion (including Bcom3 for the full year). The merger also created one of the world’s largest media consultancy and media buying firms, combining ZenithOptimedia Group with Starcom MediaVest. Adding Bcom3’s renowned advertising and communications agencies — which include Leo Burnett, Manning Selvage & Lee, Medicus and Bartle Bogle Hegarty — enhanced our ability to provide premier advertising and communications services to clients on a worldwide basis.

     The merger also opened the way for a long-term strategic partnership with Dentsu, Inc., the number one communications group in Japan and Asia as a whole and formerly a Bcom3 shareholder. This partnership is designed to offer our clients privileged access to the Japanese market, in particular in the area of media buying and consultancy. We are today the only communications group in the world providing clients with media-purchasing services spanning the whole world including Japan. As part of our partnership, we created a sports marketing agency, iSe International Sports and Entertainment AG, with Dentsu in 2003.

     Other significant events included a number of measures that helped to improve and rationalize our operational and capital structure:

•

In 2003, we dissolved Bcom3’s D’Arcy network and successfully transferred its assets to our other networks with minimal client loss. We integrated Bcom3’s businesses and back-office functions with our other operations. We also continued our program of consolidating the office space used by Bcom3 and our other operations and rationalizing the related leaseholdings; and

•

We increased the transparency of our ownership structure by merging with three investment vehicle entities that had been used by members of the Bleustein-Blanchet family, employees of our company and some other investors to hold shares in our company indirectly. The merger was effected pursuant to an agreement entered into in 1998.

     A key highlight of 2004 was the inclusion of our ordinary shares in the Paris stock market’s top index, the CAC 40.

     During 2004, there were few significant acquisitions with the exceptions of Thompson Murray, a U.S. shopper-marketing agency that will be a key component of the future Saatchi & Saatchi X worldwide marketing services network, and of a majority interest in United Campaigns, Publicis Worldwide’s partner agency in Russia.

     Other significant events in 2004 included the creation of Publicis Groupe Media and a new management team for Leo Burnett:

	•		In September 2004, we officially launched Publicis Groupe Media (“PGM”), a new management structure shared by our two media buying and media consultancy brands, Starcom MediaVest Group and ZenithOptimedia. The structure is designed to generate a variety of initiatives to enhance service to clients, while at the same time benefiting from synergies in research spending, development of consultancy tools, specialized expertise and back-office services; and
	•		We recruited Tom Bernardin as part of the succession plan for Linda Wolf and appointed him president of Leo Burnett Worldwide and CEO of Leo Burnett USA. A reorganization of Leo Burnett Worldwide followed Mr. Bernardin’s appointment at both central and regional levels and at Leo Burnett USA.

     At the management board level, the departure of Roger Haupt for personal reasons and the appointment of Jack Klues mark a new stage in the development of management structures at a point when integration of Bcom3 has been brought to a successful conclusion. Restructuring in connection with this integration, involving in particular the development of shared resource centers and reorganization of real estate, helped us to continue to achieve our objectives in 2004, in particular in terms of operating margin.

PRINCIPAL CAPITAL EXPENDITURES AND DIVESTITURES

     As a result of our strategy of global expansion, our principal capital expenditures since the beginning of 2001 have been associated with acquisitions of other advertising and communications firms. Following our acquisition of Bcom3 in 2002, we reached the point of being among the world’s largest advertising and communications firms and consequently adopted a more selective acquisition strategy. Our capital expenditures in 2001 included our acquisitions of all of or controlling interests in:

	•		Fisch.Maier Direkt, Switzerland’s leading direct marketing firm;
	•		Carré Noir, one of the best design agencies in France;

	•		FusionDMin San Francisco, a large independent customer relationship management agency since merged with Publicis Dialog;
	•		Creative AIM, a U.S. grassroots marketing agency;
	•		Sanchez & Levitan, among the largest agencies in the U.S. focused on the rapidly-growing Hispanic community; and
	•		The Triangle Group, the largest independent sales promotion group in the U.K.

     We invested a total of €77 million in making these expansion-related investments. We invested an additional €102 million in other property, plant and equipment (net of disposals), and spent €120 million repurchasing our own shares.

     In 2002, our largest acquisition, Bcom3, was made in exchange for shares and other securities and therefore did not require any capital expenditures as such. Excluding Bcom3, we made only a limited number of acquisitions in keeping with our strategy. Several other acquisitions did involve capital expenditures, including:

	•		Gravitas, a Japanese relationship marketing agency specializing in marketing services and public relations;
	•		Johnston & Associates, a U.S. lobbying firm;
	•		Direct ‘n More, a direct marketing agency in Austria;
	•		Magnesium, a Belgian marketing services specialist;
	•		Media Publics, a French firm engaged in developing sales incentives and related programs;
	•		Sales Story and Stella, two relationship marketing companies;
	•		ECA2, a French events marketing company; and
	•		Van Sluis Consultants, a Dutch public relations agency.

     These acquisitions involved capital expenditures of approximately €75 million in total. We invested an additional €64 million in other property, plant and equipment (net of disposals), and spent €180 million repurchasing our own shares. We also spent €196 million to redeem the CVRs issued in connection with our acquisition of Saatchi & Saatchi.

     In 2003, our capital expenditures related primarily to the acquisition of a 25% interest in ZenithOptimedia and a 32% interest in Starcom Motive. These acquisitions involved capital expenditures of approximately €183 million in total. We invested an additional €118 million in other property, plant and equipment (net of disposals) in 2003.

     Our significant acquisitions in 2004 were limited to Thompson Murray, a U.S. shopper-marketing agency that will be a key component of our future Saatchi & Saatchi X worldwide

marketing services network, and the purchase of a majority interest in United Campaigns, Publicis Worldwide’s partner agency in Russia. We also acquired an event communication agency in the U.S., CLT, and made earn-out payments and acquired minority interests in various agencies, parts of which had been acquired in the past, such as Triangle Group, GrupoK/Arc, Media Estrategia, and ECA2. These acquisitions involved capital expenditures of approximately €104 million in total.

     For information concerning our level of ownership in the foregoing acquired agencies, and our other subsidiaries as of December 31, 2004, see note 30 to our consolidated financial statements. We have made no material divestitures since the beginning of 2001, except for the divestitures in late 2005 of Publicis’ France-based and Netherlands-based media sales assets to JCDecaux as described in Item 5 “Operating and Financial Review and Prospects — Overview and Outlook for 2005.”

     There have been no public takeover offers by third parties in respect of our shares since January 1, 2004, nor, except as described under “— Historical Background,” have we made any public takeover offers in respect of other companies’ shares since that date.

BUSINESS OVERVIEW

     We provide services primarily in the following areas:

	•		Traditional advertising services. We provide traditional advertising services primarily through the Publicis, Saatchi & Saatchi and Leo Burnett networks. We also conduct our traditional advertising operations through smaller units, such as Fallon Worldwide and our 49% interest in Bartle Bogle Hegarty, a U.K.-based agency. We generated approximately 55% of our 2004 revenue through these activities.
	•		Specialized agencies and marketing services. We provide specialized communications services, such as public relations, corporate and financial communications, healthcare communications, direct marketing, sales promotion, interactive communications and design (collectively referred to as “SAMS”) through subsidiaries including Publicis Healthcare Communications Group (Nelson, Medicus, Klemtner/Saatchi & Saatchi Healthcare), ARC Worldwide, Publicis Dialog, Publicis Consultants and Manning Selvage & Lee. Some of these businesses generally act in conjunction with one of our advertising networks, while others operate independently. In 2004, approximately 22% of our revenue came from the provision of SAMS services.
	•		Media Operations. We conduct media buying operations through ZenithOptimedia Group and Starcom MediaVest Group. Our media sales activities are conducted through Médias & Régies Europe. Approximately 23% of our 2004 revenue was generated by these operations.

Clients

     We provide advertising and communications services to national and multinational clients around the world. A relatively high proportion of our clients are local clients of our subsidiaries around the world, something that we believe is advantageous in that locally-managed clients are often more profitable than those managed on a regional or global basis. Locally-managed clients also tend to be focused on the discrete markets in which they operate and therefore diversify our exposure to fluctuations in general market conditions. Finally, locally-managed clients give us an opportunity to take advantage of, and add to, our intimate knowledge of national and local cultures and business environments and to raise our profile in local markets. No one client accounted for more than 10% of our total revenue in 2004.

     The following chart lists our largest clients in 2004:

Publicis
Allied Domecq		Renault
Coca-Cola		Sanofi-Aventis
Deutsche Telekom		Sprint
Hewlett-Packard		Telefónica
L’Oréal		UBS
Nestlé		Zurich Financial
Procter & Gamble
Saatchi & Saatchi
BristolMyersSquibb		Procter & Gamble
Carlsberg International		Toyota/Lexus
Deutsche Telekom		Visa Europe
Diageo/GuinnessUDV
Fromageries Bel
General Mills
Novartis
Leo Burnett
Allstate		Philip Morris
ConAgra		Procter & Gamble
Fiat		U.S. Army
Hallmark		Visa International
Kellogg/Keebler		Walt Disney
McDonald’s		General Motors
Nintendo
ZenithOptimedia
Allied Domecq		Sanofi-Aventis
Astra Zeneca		Toyota
British Airways		Verizon
Hewlett-Packard
Kingfisher
L’Oréal
Nestlé
Starcom MediaVest
Allstate		Philip Morris
Coca-Cola		Procter & Gamble
General Motors		Sara Lee
Kellogg/Keebler		Sun Microsystems
Mars		U.S. Army
Miller Beer		Walt Disney
Morgan Stanley

Strategy

     With our acquisition of Saatchi & Saatchi in 2000, and our acquisition of Bcom3 and formation of a partnership with Dentsu in 2002, we became a world leader in the advertising and communications industry in terms of geographical presence, array of services and flexibility. Now that we are in the top tier of advertising and communications groups worldwide, our overall priority is to take advantage of the synergies created by our acquisitions by increasing on a country-by-country basis the scope of services we provide to clients, particularly services for which demand is growing rapidly. We also intend to continue pursuing our strategy of making selected acquisitions to round out our geographical presence and service offerings. The main components of our strategy are to:

• Expand our SAMS operations — specialized agencies and marketing services

     We currently have a number of operations that complement our traditional advertising services by providing direct marketing, sales promotion, design, corporate communications, financial communications, interactive communications and public relations services. Demand for these services from our traditional advertising clients is growing; in addition, providing them helps us to build and maintain a “holistic relationship” between us and our clients. Demand is also growing for specialized communications services such as those directed at particular ethnic groups and those relating to specific areas such as healthcare and human resources. We intend to take advantage of these trends by growing our existing SAMS operations and by making selective acquisitions.

• Make selective acquisitions to achieve critical mass in other selected markets

     We rank among the top advertising and communications firms in most of the major countries in which we operate, and we believe this gives us a visibility that is useful in the competition for new clients. In some countries, however, we have only limited operations, and acquisitions may be required in order for us to reach a position of market leadership. In addition, we believe that our extensive international experience gives us a competitive advantage in pursuing opportunities for growth in emerging economies. For these reasons, we intend to seek acquisition candidates in selected markets around the world in order to expand into promising new markets and, where necessary, to enhance our competitive positions.

Financial Targets

     We believe that pursuing the strategy outlined above, and continuing the process of integrating our operations with those of the companies we acquired, will allow us to enhance our profitability and maximize shareholder value significantly over the near term. Our primary financial goal is to achieve a 16.7% operating margin by the 2008 fiscal year (defining “operating margin” as operating income before amortization of acquisition-related intangibles divided by revenue, in each case as determined under currently applicable IFRS).

Markets

     We conduct operations in 104 countries and 196 cities around the world. Our primary markets are Europe and the U.S. Below, we show the contribution of selected geographical

markets to our revenue for the years ended December 31, 2004, 2003 and 2002 (in millions of euros):

Year		Europe		North America		Rest of the World		Total
2004		1,579		1,633		613			3,825
2003		1,543		1,737		583			3,863
2002		1,243		1,295		388			2,926

SERVICES AND BUSINESS STRUCTURE

     We provide a full range of advertising and communications services, designing a customized package of services to meet each client’s particular needs. These services generally fall into three major categories: traditional advertising, SAMS and media services.

Traditional Advertising

Services

     Traditional advertising services principally involve the creation of advertising for products, services and brands. They may also include strategic planning involving analysis of a product, service or brand compared to its competitors through market research, sociological and psychological studies and creative insight. The creation of advertising includes the writing, design and development of concepts. When a concept has been approved by a client, we supervise the production of materials necessary to implement it, including film, video, print and electronic materials. Our advertising programs involve all media, including television, magazines, newspapers, cinema, radio, outdoor, electronic and interactive media.

Business Structure

     Our primary networks — Publicis, Saatchi & Saatchi and Leo Burnett Worldwide — primarily provide traditional advertising services, but each has some SAMS operations as well. We are continuing to develop other networks as well, including Bartle Bogle Hegarty (in which we have a 49% interest) and Fallon Worldwide.

	•		Publicis. This network is comprised of Publicis advertising agencies in 83 countries around the world, including Europe, the U.S. (where its agencies include Publicis & Hal Riney, Burrell Communications and Bromley Communications), the Middle East, South Africa, the Asia/Pacific region, Latin America and Canada. Its SAMS operations include Media System, a provider of human resources communications operating in France, Publicis Dialog, a marketing services and interactive communications unit with operations in 36 countries.
	•		Saatchi & Saatchi. This network consists principally of Saatchi & Saatchi agencies in 80 countries around the world. It also includes The Facilities Group, a U.K. firm that provides a range of technical and creative services in the areas of design, artwork, print and audiovisual production, and Saatchi & Saatchi X, a worldwide marketing services network organization based in the U.S.

	•		Leo Burnett. Headquartered in Chicago, the Leo Burnett network operates full service advertising agencies in 83 countries around the world. It also operates a number of SAMS units that focus primarily on direct, database and interactive marketing and sales promotion under the ARC Worldwide banner in 37 countries.
	•		Fallon Worldwide. The principal offices of this network are located in Minneapolis, New York City, London, Sao Paulo, Singapore and Hong Kong.
	•		Bartle Bogle Hegarty. This U.K.-based network, in which we have a 49% interest, has offices in London, Singapore, Tokyo, New York and Sao Paulo.
	•		Others. Other units in this category include the Kaplan Thaler Group, a New York-based agency, and Japan’s Beacon Communications.

SAMS

Services

     The full range of specialized communications services we offer complements our traditional advertising activities. Services provided by our SAMS operations include:

	•		Direct marketing/customer relationship management. Customer relationship management (or “CRM”) focuses on building clients’ relationships with individual customers through the use of direct marketing techniques and other means (as opposed to traditional advertising services, which target groups of consumers or the public at large). Through our CRM operations, we assist clients in creating programs to reach individual customers and enhance brand loyalty. In addition, we provide the appropriate tools and database support to maximize the efficiency of those programs.
	•		Sales promotion. Our sales promotion operations seek to increase sales and awareness of clients’ products and consumer loyalty through point-of-sale promotions, coupon programs and similar means.
	•		Specialized advertising services. Our specialized agencies provide services that are generally similar to those offered by our traditional agencies. Unlike traditional agencies, however, our specialized operations focus on particular areas of advertising that have distinct characteristics and require special knowledge and experience. We provide specialized services primarily in the following areas:

	•		Healthcare communications. We have a network of agencies that work exclusively with clients in the healthcare industry to reach consumers and doctors and other medical professionals through advertising campaigns, medical conferences and symposia and other means. These agencies also provide marketing services such as public relations, consulting and sales personnel recruitment and training.
	•		Human resources communications. Through our human resources operations, we create employee recruitment-related advertising, including classified advertising and campaigns to improve a client’s

			overall image with prospective applicants, for companies seeking job applicants and recruiting firms. We also assist clients in developing internal communications programs.
	•		Multicultural communications. Some of our agencies have developed expertise in creating advertising and communications services aimed at specific ethnic groups, particularly African-Americans and Hispanics in the U.S.

	•		Corporate and financial communications. We provide corporate and financial communications services designed to help clients deliver their message to investors and the public and, in particular, to help clients achieve their goals in connection with mergers and acquisitions, initial public offerings, spin-offs, proxy contests and similar matters. We also provide services aimed at helping clients address the communications and public relations aspects of publicized crises and other major events.
	•		Public relations. Our public relations services are designed to assist clients with the management of their ongoing relations with the press and the public. These services include: (i) strategic message and identity development to help clients position themselves in their markets and differentiate themselves from their competitors, (ii) product and company launch or re-launch services, which aim to create awareness of and position a product or company with customers, and (iii) media relations services, which help clients enhance their brand recognition and image.
	•		Design. Our design services are intended to enhance the visual symbols that affect a client’s image and to ensure that the design and packaging of products are consistent with the means used to market them.
	•		Interactive communications. Our interactive communications services consist primarily of website and intranet design, Internet-related direct marketing and related services and banner advertisement design.

Business Structure

     We provide SAMS services both through our traditional advertising networks and through independent operations. Our SAMS business units include the following:

	•		Direct marketing CRM/sales promotion/digital communications. Our CRM, sales promotion and related operations include ARC Worldwide and Publicis Dialog.
	•		Specialized advertising services. Our healthcare operations are carried out through the Publicis Healthcare Communications Group. Other specialized agencies include Burrell Communications and Vigilante, Lápiz and Bromley Communications in multicultural communications and Media System in human resources communications.

	•		Corporate and financial communications and public relations. We provide these services primarily through Publicis Consultants, a specialized agency focusing upon corporate communications, financial communications, public relations and design, and Manning Selvage & Lee, a public relations agency. Publicis Consultants has offices in the U.S. (where its operations include Winner & Associates), as well as France and elsewhere in Europe. Manning Selvage & Lee has its headquarters in New York and offices in countries around the world. Both units are now part of a management board called PRCC, Public Relations and Corporate Communications Group.
	•		Other. Our SAMS units in other categories include Capps Digital or Mundocom in pre-press and Market Forward in digital asset management.

Media Operations

Services

	•		Media buying and media planning. Our media buying services are often, though not always, provided in conjunction with other advertising services. Through our media buying operations, we analyze various media outlets, including television, print, radio, Internet and outdoor venues, and demographic and ratings information. In light of this analysis, we help plan the most effective means of pursuing an advertising or communications strategy. We then book the media space necessary to implement the strategy, using our experience and buying power to obtain favorable rates for our clients.
	•		Media sales. Our media sales operations sell advertising space in outdoor media, print, radio and movie theaters to advertising and media buying firms on behalf of media companies. In some instances, they sell space to advertising and media buying operations that are part of our group. They do so, however, on an arm’s-length basis, dealing with those businesses on the same terms as other customers.

Business Structure

	•		Media buying and media planning. Our media buying operations consist primarily of ZenithOptimedia Group and Starcom MediaVest Group. ZenithOptimedia conducts media services operations in 53 countries around the world. It has a strong presence in the U.K., the U.S., Germany, France and Spain. Starcom MediaVest conducts media services operations in 71 countries around the world, with a particularly strong presence in the U.S.
	•		Media Sales. We conduct media sales activities through Médias & Régies Europe through subsidiaries including Métrobus and Régie 1 (France), Publisistemas (Spain) and Médiavision (France and international).

Research Programs

     We have developed a number of programs designed to enhance the effectiveness of our communications services by providing anthropological, psychological and cultural insights into the behavior and attitudes of consumers and other target audiences. These programs include the following:

     Context Analysis. A media-screening tool used by Publicis network agencies in the network involved in strategic planning. Context Analysis uses sociological methods to track new trends and analyze the way the media covers them.

     Holistic Difference. Holistic Difference, developed by the Publicis network, is a continuous research cycle of consumer insight into the brand the connections that communications can make between the brand and the consumer and the effect these have on the business results.

     The Ideas Brief. A system developed by Saatchi & Saatchi to help an agency identify ideas for transforming a client’s business, brand and reputation. The system has three parts: the “Equity Onion,” which is used to identify a brand’s core value of essence, the “Brand Axle,” used to identify the extent to which a brand associated with one product can be successfully used to market other products and the “Brand Temple” for multi-product companies that use several sub-brands.

     The Ideas Toolkit. A Saatchi & Saatchi program that facilitates the monitoring of the effectiveness of a communications program using anthropological and psychological methods.

     The Lovemaker. A joint venture with QiQ. A unique approach using quantitative research with an intense qualitative element to determine the degree to which a brand is a lovemark and benchmarks it against other brands either in the category or in the broader market.

     The Lovemarks Hothouse. A joint venture with On Your Feet. A practical, non-theoretical workshop which taps into the emotional and experiential potential of the brand the organization behind it. It is intended to make lovemarks theory and strategy actionable.

     The Brand Belief System. A tool used in the Leo Burnett network to analyze and develop the customer loyalty effects of a communication strategy.

     Zoom. Zoom (Zenith Optimisation of Media) is a series of tools used, among other things, to model the effectiveness of proposed advertising campaigns, evaluate media outlets and media-use strategies and track audience responses to major events.

     Tardiis. Tardiis is a state of the art TV optimizer exclusively developed for Starcom MediaVest Group (“SMG”). It harnesses the power of viewing at the program level to provide optimized schedules for individual brands, as well as allocating programs across multiple products and demos for multi-brand clients. Using Tardiis, SMG clients have saved an average of 15% of their TV spend.

     InnoVest^SM. A proprietary system for accelerating and deepening the acceptance of new products and services based on the sociological phenomenon known as “Diffusion of Innovation.”

     Media Pathways^SM. A unique qualitative and quantitative research procedure for understanding the link between media, lifestyle and category usage among a brand’s marketing target. Media Pathways provides a method for obtaining ideas for new communication options as well as more effective ways to use existing options.

     Media Scopes. Project-based tools to address tactical media issues including:

	•		TargetScope — Surveys of key demographic groups to identify media opportunities, e.g., Kidscope, an online research tool that talks to kids all over the world about attitudes, motivations and communication vehicles.
	•		Event Tracker — A series of studies to evaluate the effectiveness of advertiser participation in major global/local TV events such as the Olympics and the Academy Awards.
	•		IP Tracker — an online tracking tool which collects data on awareness and use of web sites as well as deep dives into areas which enable development and evaluation of the most effective on line/off line communication programs.

     BattleField. This tool provides strategic insights into category and brand dynamics by comparing brand(s) against competition in terms of share, volume and value, pricing, adspend, share of voice and tracking/recall scores. Battlefield Modeling hones in on the impact that advertising has on brand sales.

     Brand Contact Audit (BCA) and Consumer Contact Audit (CCA). These are disciplined and objective assessments based on all traditional and non-traditional contact points to help identify optimal targeting opportunities.

     Wear-out. Wear-out is a proven media-based assessment of actual wearout factors that allows us to understand and quantify the decay in effectiveness of television and radio commercials over time.

     Budget Allocation Time (“BAT”). BAT is SMG’s scheduling tool that allows planners to optimize the impact of schedules based on media costs, sales patterns and the brand’s advertising responsiveness.

     The Brand Library™. This is a worldwide, econometric database of advertising’s impact on sales.

     Brand Impactor. Brand Impactor runs off data from the Brand Library™ to allow our planners to predict key advertising factors, of speed, frequency, and strength.

     Market Contact Audit. Through a worldwide license agreement with Integration, the independent consulting firm that developed MCA, SMG delivers an assessment of impact/potential of alternate contact points with brand target, common currency to compare

effectiveness of contact options, prioritization of most influential contact options and efficiency assessment for contacts by linking effectiveness with cost data.

     Passion Groups™. A quantitative and qualitative means of creating targets based, not on age and gender, but on the consumer’s interest and participation in activities from the job to having fun, as well as mindsets and lifestyles.

Competition

     Our principal competitors include major international advertising and communications groups, such as Omnicom Group, Inc., the Interpublic Group, WPP Group plc and Havas, independent local advertising agencies in markets around the world and SAMS businesses that focus on specialized areas of communications services.

     Advertising and communications markets are generally highly competitive, and we continuously compete with national and international agencies for business. Competition may increase in the near future as a result of multinational clients’ increasing consolidation of their advertising accounts with a very limited number of firms.

Governmental Regulation

     Our business is subject to government regulation in France, the U.S. and elsewhere. As the owner of advertising agencies operating in the U.S. which create and place print, television, radio and Internet advertisements, we are subject to the U.S. Federal Trade Commission Act. This statute regulates advertising in all media and requires advertisers and advertising agencies to have substantiation for advertising claims before disseminating advertisements. In the event that any advertising we create is found to be false, deceptive or misleading, the U.S. Federal Trade Commission Act could potentially subject us to liability.

     In France, media buying activities are subject to the Loi Sapin, a law intended to require transparency in media buying transactions. Pursuant to the Loi Sapin, an advertising agency may not purchase advertising space from media companies and then resell the space on different terms to clients. Instead, the agency must act exclusively as the agent of its clients when purchasing advertising space. The Loi Sapin applies to advertising activities in France when both the media company and the client or the advertising agency are French or located in France. We are not aware of any existing, or contemplated, similar legislation in the other countries in which we operate.

     Governmental authorities in a variety of countries have proposed and enacted limitations on the collection and use of information regarding Internet users. In addition to government activity, a number of industry and privacy advocacy groups from time to time consider various new, additional or different self-regulatory standards. Because our marketing services activities rely on the collection and use of client data, new regulations or standards imposed in this area could have an adverse impact on our operations.

Seasonality

     Clients’ advertising and communications expenditures typically fluctuate in response to actual or expected changes in consumer spending. Because consumer spending in many of our major markets is typically lower in the beginning of the year (following the holiday season) and in July and August (the most popular vacation months in Europe and North America) than at other times of the year, advertising and communications expenditures are typically lower as well. Accordingly, our results of operations are often stronger in the second and fourth quarters of the year than they are in the first and third quarters.

Raw Materials

     Our business is not typically affected in any material respect by changes in the availability or prices of any raw materials.

Marketing Channels

     We market our services primarily by analyzing the communications needs of our clients and prospective clients and by demonstrating to such clients and prospective clients how we propose to meet those needs. Our strong brands and reputation are key elements of our marketing strategy.

Organizational Structure

     We conduct our operations through approximately 950 direct and indirect subsidiaries. Information concerning our consolidated subsidiaries is provided in note 30 to our consolidated financial statements.

Property, Plants and Equipment

     We conduct operations in 196 cities around the world. In general, we lease, rather than own, the office properties we use. As of December 31, 2004, we owned real property assets with a net book value of €45 million. Our principal real property asset is the building we own and use as our headquarters at 133 avenue des Champs-Elysées in Paris. We use approximately 12,000 square meters of office space in the building for advertising and communications activities and approximately 1,500 square meters of commercial property are occupied by the Publicis Drugstore and two public cinemas.

     We own four floors of the building occupied by Leo Burnett at 15 rue du Dôme in Boulogne, a suburb of Paris. We also have a capital lease contract expiring in 2007 for the two other floors in this building. Following the acquisition of Saatchi & Saatchi, we also own a six-story building located at 30 rue Vital Bouhot in Neuilly-sur-Seine, a suburb of Paris, comprising approximately 5,660 square meters of office space which is for the most part occupied by us.

     Outside of France, we also own buildings in Brussels, Amsterdam, Lisbon, Lima and Seoul, comprising a total of 14,000 square meters, all in city center locations.

     We have significant information systems equipment dedicated to the creation and production of advertising, management of media buying and administrative functions. In

addition, gross property and equipment includes €80 million (€20 million net book value) of billboards and furniture and fixtures belonging to the our outdoor display companies, principally JC Decaux Nederland (ex-Publex) in the Netherlands, and Métrobus, a media sales unit specializing in public transportation advertising space.

     The net book value of assets under capital leases in the consolidated balance sheet is €98 million at December 31, 2004. The principal assets capitalized are two floors of the office building located in rue du Dôme in Boulogne Billancourt (a Paris suburb) and the Leo Burnett office building in Chicago. Leo Burnett’s capital lease contract is in respect of assets with a value of €91 million depreciable over 40 years and has been valued by an independent expert. The office building is located at 35 West Wacker Drive in Chicago, Illinois (United States).

Item 4A. Unresolved Staff Comments

     Not applicable.

Item 5. Operating and Financial Review and Prospects

     The following discussion should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this annual report. Our consolidated financial statements have been prepared in accordance with French GAAP, which differs in certain significant respects from U.S. GAAP. See note 31 to our consolidated financial statements for (i) a discussion of the principal differences between French GAAP and U.S. GAAP as they relate to us and (ii) a reconciliation to U.S. GAAP of our consolidated net income and consolidated shareholders’ equity as calculated under French GAAP. The following discussion contains forward-looking statements that involve risks and uncertainties, including, but not limited to, those described under “Key Information — Risk Factors.”

OVERVIEW AND OUTLOOK FOR 2005

     Our company grew dramatically in the 2001-2004 period, becoming one of the four largest advertising and communications groups in the world. This growth resulted primarily from acquisitions. Although market conditions were generally weak over much of the period, improvement in the performance of our existing businesses made some contribution to our growth as well.

     We believe our prospects for 2005 are favorable, with positive trends in advertising firms across all geographical regions, even without exceptional events such as the Olympic Games or the European Football Championship. Considering the scale of new business booked in 2004 and early 2005, we expect to once again be able to outpace the market and post strong organic growth. We believe our operating margin should increase due to restructuring initiatives taken in 2004 as well as rationalization projects now under way. We will also be continuing efforts to improve management of working capital and cash to reduce debt. In December 2005 we were awarded investment-grade ratings (BBB+ by Standard & Poors and Baa2 by Moody’s — both ratings with a stable outlook) that place us among the industry’s best performers in this area.

     In geographical terms, we expect North America, the Asia/Pacific region and Latin America to post consistently good growth, whereas Europe is expected to lag, in particular due to tougher economic conditions in France, Germany and northern Europe.

     The significant accounts we won in 2004 include the following:

     Publicis. Globally, Publicis won new accounts with Sanofi-Aventis (with several Groupe entities), and Zurich Financial. Within the U.S., new clients included 24-Hour Fitness, Beringer Blass Wine Estates, GSK/Oskal, L’Oréal/SoftSheen-Carson, Nestlé/Hot Pockets, Sprint/Local Consumer Solutions Division and Whirlpool/Gladiator GarageWorks. In Europe, Publicis conducted new business with Bundesversicherungsanstalt (Germany); Renault and Agencia Tributaria (Spain); the Ministry of Health, Lee Cooper, Cœur de Lion and Fidelity Investments (France); UDC, Region of Calabria, Ministry of Education, Ministry of Public Works, Manetti & Roberts beauty products and Nestlé/Buitoni (Italy); Fortis Bank (Belgium); Paddy Power and Powergen (U.K.). Finally, in the Asia/Pacific region, Publicis won new accounts with L’Oréal/MiniNurse (China); Purefoods (Philippines); Jetstar and Gulf Air (Australia); Excelcomindo (Indonesia); Renault Samsung Motors (extension); Korea Telecom, S Oil, Daewoo Consumer Electronics and Hyundai Card ‘S’ (Korea); and Shu Uemura (Japan).

     Leo Burnett. Within the U.S., new accounts included ConAgra/Life Choice and Pam Cooking Spray, PetsMart and Simmons. In Europe, Leo Burnett conducted new business with Fissler (Germany); Loterias del Estado and the Red Cross (Spain); Grana Padano (Italy); Caixa de Credito Agricola and Sogrape wines (Portugal); Meat and Livestock Commission, Norwich Union and Scottish Widows (U.K.); l Swisscanto pension funds (Switzerland); and Unibanka (Slovakia). In the Asia/Pacific region, Leo Burnett won new accounts with McDonald’s (Australia); GM/Cadillac (China); and McDonald’s (Thailand and India). In Latin America, Leo Burnett worked with Supermercados Norte (Argentina); Swatch (Brazil); EASY DIY stores (Chile); and Mexicana de Aviacion, Bacardi and Aeromexico (Mexico). In the rest of the world, new accounts included Telenor (Pakistan) and Ibrahim Ulagay pharmaceuticals (Turkey).

     Saatchi & Saatchi. Globally, new accounts included Lego/Duplo and Clikits Universe, Novartis/Theraflu, Triaminic, Voltaren and Otrivin, P&G/Prilosec (project). Within the U.S., new accounts included Air Tahiti Nui, MovieLink, Olympic Paint and Yoplait (extension). In Europe, Saatchi & Saatchi conducted new business with Toyota/Lexus (extension) and Sagatiba Rum (Europe); Suez (corporate) and Axa (credit) (France); Friesland Hellas/NoyNoy Yoghurts (extension) and OTE (telecom operator) (Greece); ENEL/Terna (extension — Italy); Snipp Juices (Czech Republic); Visa (extension), P&G/Olay Daily Facials, Saga Services automobile insurance and WRAP (Water and Resources Action Programme) (U.K.); and FöreningsSparbanken (Sweden). In the Asia/Pacific region, Saatchi & Saatchi’s new business included Pacific Brands and Emirates Airline (Australasia); Lion Nathan/Tooheys New (extension) and Sydney Morning Herald (Australia); Snowflake Beer (China); Reliance Infocom (India); and DB breweries (New Zealand). Finally, in the rest of the world, new accounts included Ritz-Carlton Hotels (North America, Caribbean and Mexico); Embratel Telecom (Brazil); and Qatar Airlines (Qatar).

     Other advertising networks and agencies. Fallon Worldwide’s new accounts included ConAgra Snack Foods, Starz Encore and United TED (U.S.); ConAgra and Volkswagen/Golf (Japan); and BT Broadband, EMAP Magazine, Holsten Pils, Jacobs Creek Wines and OMSCO

(U.K.). The Kaplan Thaler Group (U.S.)’s new accounts included Eight O’Clock Coffee, Foxwood Resort Casino and U.S. Bank. MS&L won new accounts with Equifax and Sanofi-Aventis (extension) (U.S.); and P&G (extension — U.K.). Bromley Communications (U.S.) won new accounts with San Antonio Convention and Visitors Bureau and Circuit City. Conill Advertising (U.S.) conducted new business with T-Mobile. Finally, Beacon Communications (Japan) conducted new business with McDonald’s (jointly with Dentsu), Toys ‘R’ Us, Skymark Airlines, and Diageo Spirits.

     Starcom MediaVest Group (media buying and consultancy). In the U.S., Starcom won new accounts with Applebee’s Restaurants, Caterpillar, Finnish Line, General Motors (out-of-home), Heineken/Dos Equis, Heinz Frozen Foods, Lego, Mars/Masterfoods, Oracle, Procter & Gamble (media-planning) and Chuck E. Cheese restaurants. Within Europe, new accounts included Interbrew/Beck’s (Italy, Netherlands, Czech Republic and Ukraine); Kraft Foods (U.K. and Sweden + extension in the U.S.); Versatel (Germany); Kraft Foods, State Lottery, Sunny Delight and Treasury (Spain); Capital One, Levi’s and Sacla (Italy); U.S. Pharmacia (Poland); Vattenfall (electricity) and Lindex (Sweden); Raiffeisen Bank (Czech Republic); and Barclay’s/First Plus, Harvey’s and Pizza Hut (U.K.). In the rest of the world, Starcom conducted new business with Diageo/Johnnie Walker Black Label (Asia); General Mills (China); Coca-Cola (Hong Kong); and Coca-Cola (Peru).

     ZenithOptimedia (media buying and consultancy). Globally, ZenithOptimedia won a new account with Nestlé. In the U.S., new accounts included Ferrero and WildBlue. Within Europe, ZenithOptimedia conducted new business with AMB Generali Holding, Frosta and Nordsee (Germany); Telenet (Belgium); Bolton (Italy); Heineken, Grupo SOS Cuetara, Honda, Multiopticas and Sygma bank (Spain); Cinna, Intermarché, Karavel/Promovacances, Ligne Roset, Ile de France region and Siemens Corporate (France); and Associated British Foods, O2, Transitions Optical and Wella (U.K.). Finally, in the Asia/Pacific region, new accounts included News Corporation and Jetstar (Australia); SmarTone (Hong Kong); Nokia (India); and Taiwan Telecom Group.

     Specialized agencies. Arc North America (U.S.) won new accounts with Buena Vista Datacasting/Movie Beam, California State, Capital One, Häagen Dazs, P&G/Always, Whisper, PUR, Respiratory brands and other products, and Zale’s. Publicis Healthcare Communications Group won new accounts with BMS/SRC Kinese and Galderma International/Clobex (worldwide); Yamanouchi (project - Europe); Eli Lilly and Novartis/Prexige (Germany); Abbott/Humira, AstraZeneca/Symbicort, Avapro/Avalide, Bayer/Pravachol, Berlex/Bonefos, Bristol-Myers Squibb+Sanofi-Synthélabo/Plavix, NitroMed/BiDil, Roche+GsK/Boniva, Sanofi-Synthélabo/Eloxatin, Hyalgan and Uroxatral, Schering-Plough+GsK/Levitra (U.S.); several brands for Boots Healthcare International, Crookes Healthcare OTC products and Lundbeck/Cipralex (U.K.).

The most important accounts lost during the year were:

	•		Toys ‘R’ Us, Lexmark, Earthlink and Subway (U.S.) in advertising; and
	•		Miramax and Paramount Pictures (U.S.) and SC Johnson (Europe) in media consultancy and media buying.

In addition, we have won a number of new accounts since the beginning of 2005, including media-buying for General Motors in the U.S. and JPMorgan Chase globally, advertising for Revlon and American Express Financial Services in the U.S. and for Schering-Plough globally. We expect that these new contracts will help to largely offset accounts lost in 2004.

     Publicis Groupe divested in late 2005 France-based and Netherlands-based media sales assets to JCDecaux: its 50% interest in SOPACT (Société de Publicité des Abribus et Cabines Téléphoniques), the company managing the advertising contract for bus shelters in Paris, a 33% interest in Métrobus, the company managing advertising space in the Metro, RER suburban rail system and buses, as well as advertising space in the Marseille metro and bus networks in some 60 other French cities and finally its 50% interest in JCDecaux Nederland BV and VKM, companies that manage urban furniture contracts for main Dutch cities. Aggregate proceeds for the sale of these three interests amount to €110 million.

     In September 2005, Publicis Groupe acquired through its Public Relations and Corporate Communications Group, a 50.01% stake in Freud Communications, the largest independent British consumer public relations firm. This acquisition reinforces Publicis Groupe’s presence in the dynamic U.K. advertising and communications market. Its core business is consumer public relations for brands such as Nike, KitKat, Tropicana, Walkers, Nescafé, Jack Daniel’s and AOL. In recent years the company has also seen dynamic growth in its Corporate, Film, Entertainment and International divisions, with clients including Sony Pictures Entertainment, Nestlé, Time Warner, Pepsico and the London Development Agency.

     In November 2005, Publicis Groupe also announced the acquisition of a majority stake in eventive Holding, the No. 1 event group in Austria and a key player in Germany and Switzerland. eventive, with offices in Vienna, Hamburg, Munich, New York and Beijing, will be part of the Publicis Events Worldwide network and will soon be renamed as Publicis eventive.

     Lastly, Publicis Groupe has agreed to acquire a 60% stake in Solutions Integrated Marketing Services, the No.1 marketing services agency in India. The transaction is still subject to the approval of the Indian government’s Foreign Investment Promotion Board. Once this transaction is completed, Solutions will become a resource to all Publicis Groupe agencies, and in particular to its large global marketing services networks: Arc Worldwide, Saatchi & Saatchi X, and Publicis Dialog. Solutions’ areas of expertise mirror the four disciplines offered by Publicis Groupe’s marketing services networks: direct, interactive, promotional and shopper/retail marketing.

Other Factors

     Among the factors that could cause our results of operations to differ materially from our expectations are those described under “Key Information — Risk Factors.”

BASIS OF PRESENTATION

     Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with French GAAP. The reported financial condition and results of operations are sensitive to accounting

methods, assumptions, estimates and judgments that underlie the preparation of our consolidated financial statements. We base our estimates on our experience and on various other assumptions deemed reasonable, the results of which form the basis for making judgments about the carrying values of our assets and liabilities. Actual results may differ significantly from these estimates.

     When comparing our performance between years, we discuss non-GAAP financial measures relating to the impact that foreign currency rate changes, acquisitions/dispositions and organic growth have on reported revenue. For example, we determine organic revenue growth by adjusting reported revenue of the prior year:

	•		To apply current year foreign exchange rates to prior year local currency figures;
	•		For entities acquired, by including current year revenue in prior year revenue; and
	•		For entities sold, by excluding prior year revenue so that the period of consolidation is similar in both years.

     Our management believes that discussing organic revenue provides a better understanding of our revenue performance and trends than reported revenue because it allows for more meaningful comparisons of current period revenue to that of prior periods. Our management also believes that organic revenue determined on a generally comparable basis is a common measure of performance in the industry in which we operate.

Critical Accounting Policies

     Our consolidated financial statements are prepared in accordance with French GAAP, which requires the use of estimates and assumptions. We believe that, of our significant accounting policies (which are summarized in note 1 to our consolidated financial statements), the following involve the greatest degree of judgment and complexity, and are therefore most likely to affect our consolidated net income materially if various assumptions were changed significantly. For a discussion of certain similar accounting policies under U.S. GAAP, see “— Critical Accounting Policies under U.S. GAAP.”

     Allowance for Doubtful Accounts

     Accounts receivable is presented net of our allowance for doubtful accounts. An allowance for doubtful accounts is recognized for accounts receivable for which there is a collection risk. The allowance is assessed based on past experience, reviews of ageing and analysis of specific accounts.

     Property and Equipment, Goodwill and Intangible Assets

     We amortize property and equipment, goodwill and intangible assets over their useful lives. Useful lives are based on our estimate of the period that the assets will generate revenue. Assets are reviewed for impairment whenever changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

     Deferred Taxes

     We record a valuation allowance to reduce our deferred tax assets to the amount determined to be realizable. Significant management judgment is required in assessing the amount of valuation allowance required. In the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of our net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

     Revenue Recognition

     Substantially all of our revenue is derived from commissions and fees for advertising and communications services. A written agreement with clients (e.g., purchase order, letter, contract) indicating the nature and the amount of the work to be performed is a prerequisite for any recognition of revenue. For commission based customer arrangements, including advertising creation and media space buying services, revenue is recognized at the date of broadcast or publication. For sales of technical advertising (e.g., radio, television, movies, brochures, mailings, studies), revenue is recognized following final client acceptance of the delivered product. For fees (e.g., project based arrangements, fixed-fee contracts, time-based arrangements), revenue is recognized when the service is rendered, based on the percentage of completion method. Some of our contractual arrangements with clients also include performance incentives that allow us to receive additional payments based upon our performance for the client measured against specified qualitative and quantitative objectives. We recognize the incentive portion of the revenue under these arrangements when the client achieves the relevant goals, the bonus is no longer contingent or refundable under the contractual arrangement with the client and when collectibility is assured.

     Scope of Consolidation

     Except where otherwise indicated, information regarding operations acquired in the 2002-2004 period is included in our consolidated financial statements only from the date of acquisition. For example, we include only three months (plus five days) of results for Bcom3 in our 2002 consolidated financial statements because we acquired it at the end of September 2002. During those three years, we have not disposed of any material operations.

CONSOLIDATED OPERATIONS — 2004 COMPARED TO 2003

Our Company as a Whole

     Revenue

		Total
		(€ millions)
2003 (as published)			3,863
Components of revenue changes (excluding organic growth):
Impact of exchange rate changes			(183	)
Other changes in scope of consolidation			(1	)
2003 Revenue at comparable exchange rates and scope of consolidation			3,679
Organic growth(1)			146
2004			3,825

     Consolidated revenue of Publicis to December 31, 2004 came to €3,825 million, edging down just 1% from €3,863 million in 2003. This is principally due to the decline of the U.S. dollar against the euro, since revenue for the year showed an organic rise of 4%. The effect of changes in the scope of consolidation was limited.

     With the euro up sharply against the dollar, translation of dollars into euros accounted for €156 million out of a total negative foreign-exchange impact of €183 million altogether. The average euro value of the dollar was down 9% from 2003 to 2004. Other currencies had only a marginal impact on consolidated financial data. Importantly, the effects faded somewhat as of the second quarter.

     At constant exchange rates and scope of consolidation, revenue showed an organic rise of 4%. This overall figure reflected the combined effects of like-for-like rises that included 2% in Europe, 2.7% in North America, 10% in the Asia/Pacific region, 15.9% in Latin America and 22.1% for the rest of the world (i.e., Africa and the Middle East).

     Expenses

     Total operating expenses were down 2.1% to €3,118 million from €3,186 million in 2003. As a percentage of revenue, expenses decreased from 82.4% in 2003 to 81.5% in 2004. Payroll expense amounted to €2,197 million, or 57.4% of revenue, down a full percentage point from 58.3% in 2003. This is in large part attributable to the effects of restructuring in connection with the integration of Bcom3 and the establishment of shared resource centers. The decline is all the more significant as staff numbers were up by 907 at constant scope and structure. Other operating expense, amounting to €921 million, represented a nearly constant 24% of revenue. Operating income before depreciation and amortization thus rose 4.4%, from €677 million or 17.5% of revenue in 2003 to €707 million or 18.5% in 2004.

     Depreciation and Amortization

     Depreciation and amortization for the year ended December 31, 2004 amounted to €117 million or 3.1% of revenue, down from €124 million in 2003.

     Operating Income

     For the reasons stated above, our operating income before depreciation and amortization rose 4.4% to €707 million in 2004. Operating income before amortization and impairment of the value of acquisition-related intangibles rose 6.7% from €553 million in 2003 to €590 million, bringing a sharp rise of 110 basis points in operating margin (operating income before goodwill and amortization of acquisition-related intangibles/revenue), from 14.3% to 15.4%, beating the Publicis Groupe target.

     In 2004 Publicis Groupe recognized impairment of the value of acquisition-related intangibles in a total amount of €123 million, much of this being for the value of Nelson Communications’ client portfolios and the Nelson brand, which have suffered steep declines since the acquisition of the company in 2000. The bulk of the remainder concerned the client portfolios of Frankel and, to a lesser extent, Fallon, both also acquired in 2000.

     Financial Income/Expense

     Net interest and other financial items represented a charge of €39 million, compared with €60 million in 2003, a steep decline reflecting a number of changes and recent moves to simplify the balance sheet. Interest expense on Interpublic exchangeable bonds was eliminated as a result of the exercise of holders’ put options in March 2004. Results also reflect the impact over four months of the redemption of the bond component of bonds with attached equity warrants (OBSAs) and a significant contribution from Credit Linked Notes (“CLN”). These contributed to interest income from January to September and their sale at the end of September 2004 also had a positive effect, mainly through reversal of interest-income deferrals. Charges for other debt, primarily at fixed interest rates, showed no significant change.

     Exceptional Income/Charge

     Exceptional items represented a net income of €23 million in 2004, up from a charge of €7 million in 2003. The 2004 income resulted from redemption of the bond component of bonds with attached equity warrants (OBSAs) and the sale of CLN in September 2004 led to recognition of a €26 million capital gain in addition to an exceptional charge of €3 million, mostly representing capital losses on other disposals.

     Income Tax

     We incurred income tax of €134 million in 2004, down from €172 million in 2003. The effective tax rate came to 33.8%, compared to 37.8% in 2003. This decrease is in large part attributable to the first benefits of measures taken to optimize Publicis Groupe’s tax position and simplify legal structures in the wake of the Bcom3 acquisition. Publicis Groupe also reversed deferred tax liabilities of €130 million relating to the redemption of the bond component of bonds with attached equity warrants (“OBSAs”), reflecting the difference between the fair value and book value of these securities. This impact has not been included in the effective tax rate for the year ended December 31, 2004 (see notes 2.1 and 8 to our consolidated financial statements).

     Income from Companies Accounted for by the Equity Method

     There was no material change in our interest in the income of affiliates accounted for by the equity method (€6 million in 2004 compared to €4 million in 2003).

     Goodwill Amortization

     Amortization of goodwill amounted to €188 million in 2004, up from €113 million in 2003. This increase included €88 million in exceptional amortization relating to Triangle, Publicis Casadevall Pedreño, Publicis Peru and Winner & Associates, to mention only the most significant ones.

     Minority Interests

     Minority interests in income increased from €24 million in 2003 to €26 million in 2004, due primarily to the rise in earnings of agencies with minority shareholders outweighing the effects of the 2003 buyout of minority shareholders in ZenithOptimedia and Starcom Motive.

     Net Income and Earnings Per Share

     After amortization of goodwill, net income after minority interests came to €210 million, a rise of 40% from €150 million in 2003.

     Earnings per share before amortization of goodwill and impairment of acquisition-related intangible items and excluding exceptional items came to €1.74, up 21% from €1.44 in 2003, while earnings per share after these items came to €1.15 after €0.82 — a rise of 40% exactly matching that in total net income. Fully diluted earnings per share before amortization of goodwill and impairment of acquisition-related intangible items and excluding exceptional items rose 14% to €1.40 while fully diluted earnings per share after these items was also up 29% at €0.97.

By Geographical Area

     Europe

     Publicis. Publicis’ business in France suffered from the loss in 2003 of the Carrefour account, while new accounts had still to yield their full benefits. Revenue was also hit by the persistent difficulties of human-resource communications at Media System and the temporary negative effects of the merger between Publicis Etoile and Publicis Dialog. In the U.K., business was satisfactory, with the Allied Domecq account making a positive contribution. Performance in the “Northern Europe” region suffered from lackluster market conditions in Germany and the Netherlands, compounded by agency reorganization and management changes, as well as particularly testing conditions in Scandinavia during the first half. In the southern Europe region, Publicis Worldwide faced divergent trends: Italy got back onto an encouraging growth path, but the Spanish market, which had a very good year in 2003, suffered from the effects of the change of government on government advertising at the end of the year, and markets were down from the previous year in both Portugal and Greece.

     Leo Burnett. Leo Burnett continued to show a moderate overall decline, mainly because of the loss of the Philips account combined with cutbacks in Fiat’s advertising investment and delays in benefits from the merger with D’Arcy in countries including France and Italy. Conditions remained difficult in Northern Europe, particularly Norway, Denmark and the Netherlands, but Leo Burnett Germany posted a healthy rise in revenue.

     Saatchi & Saatchi. At Saatchi & Saatchi revenue returned to a steady path, with the new Europe-wide account for the Bel Group and a healthy inflow of new business from local clients contributing to improvement on key markets including France and Germany. The London agency continued to suffer from the loss of accounts in 2003 and internal reorganization, leading in particular to the appointment of a new CEO, Lee Daley. Agencies in Spain and Italy benefited from favorable market conditions and new accounts.

     Starcom MediaVest Group. Business was satisfactory on the whole, although not in France and Italy. Starcom MediaVest U.K. benefited from new accounts including Cadbury, Western Union, Sun Microsystems, Barclay Card, Oracle and Kraft, while the German agency put in a good performance backed by business with Cadillac and Procter & Gamble. Starcom MediaVest Russia continued to report strong growth.

     ZenithOptimedia Group. ZenithOptimedia Group also experienced strong growth in 2004. ZenithOptimedia U.K. was able to offset the loss of British Telecom and KFC accounts with the arrival of UIP, Procter & Gamble and, more recently, O2, combined with the increased media presence of some existing clients. In continental Europe, trends improved throughout the year, with revenue up sharply, particularly in France, Germany, Belgium and Spain, although conditions were difficult in Italy and the Netherlands.

     Médias & Régies Europe. Specializing in media sales and representation, Médias & Régies Europe clearly returned to growth in 2004 over the previous year, against a backdrop of economic firming. The strongest sectors were radio and outdoor advertising. Cinema advertising representation through Médiavision staged a spectacular recovery from the second quarter on. Sales for the press were also back on an upward track.

     North America

     Publicis. A decline in Canada’s business was temporary, being essentially attributable to a freeze on the advertising outlays of Quebec government agencies. This was later offset by a strong showing in new business, particularly in Toronto. In the U.S., Publicis USA posted an excellent performance driven by new accounts and a rise in business with existing clients and Bromley’s successes in Hispanic communications.

     Leo Burnett. Advertising revenue booked by Leo Burnett USA and Chemistri in the U.S. edged down as new accounts booked in 2004 (e.g., Petsmart, ConAgra) and longstanding ties to major clients failed to fully offset the loss of accounts including Delta Airlines, Gateway, Polaroid, Toys ‘R’ Us, and Starbuck’s in late 2003 and early 2004. Major management changes and reorganization at Leo Burnett USA should turn the trend around in 2005. Arc North America, the marketing services unit that results from the merger of Frankel, Arc, Semaphore Partners and iLeo, and is now part of the Leo Burnett network, posted a decline in revenue reflecting the continued revamp of its offering and organization.

     Saatchi & Saatchi. Revenue suffered from the loss of the Johnson & Johnson account at the end of 2003, which was not offset by any significant new business in 2004. Major reorganization of the New York agency under its new CEO Mary Baglivo should start to yield benefits in the course of 2005.

     Fallon USA. Fallon USA showed continued growth, driven by Virgin Mobile and increased spending from major traditional clients, cushioning the impact of the loss of Subway.

     Starcom MediaVest Group. Performance at Starcom MediaVest Group benefited from large accounts including Coca-Cola/USA and Mars/Masterfoods as well as the extensions of business with Procter & Gamble and brisk media business with large clients. The Diversified Services Division continued to post strong growth with sports marketing and event specialist Relay benefiting from increased business.

     ZenithOptimedia. Business in the U.S. and Canada was strong, reflecting accounts booked last year that include AstraZeneca, Toyota Scion, Abbott Laboratories, Sprint and Sanofi in the U.S., and Kia, Pfizer, Prizm, General Mills, Cadbury and Canada Post in Canada, as well as increased spending by some existing clients.

     Healthcare. Medicus USA made an excellent showing, expanding business with existing clients such as Sanofi-Synthélabo and AstraZeneca, at the same time posting particularly good results in Medical Education. Klemtner revenue picked up, in particular with Sanofi, Roche and Schering Plough accounts, but Nelson Lifebrands suffered continued declines as a result of accounts lost, reduced client spending, and reorganization of the agency.

     Rest of the World

     Publicis. Publicis’ revenue in Latin America showed strong rises except in Brazil, where the main negative fact was the loss of the Carrefour account, while overall performance in Asia was satisfactory, although short of the mark in Malaysia and Thailand. Finally, revenue showed a healthy rise in the Middle East.

     Leo Burnett. Growth was strong in other parts of the world. Business in Latin America benefited from firm trends in Mexico, Colombia, Venezuela and Brazil, reflecting increased spending from certain international clients. In the Asia/Pacific region, strong showings in China, India, Thailand and Malaysia, with a large number of new accounts booked, including Cadillac in China and McDonald’s in several countries, including Japan, more than offset difficulties encountered in Singapore and Australia. Revenue also showed a healthy rise in the Middle East, benefiting from growth in local accounts.

     Saatchi & Saatchi. Revenue rose steeply in both Latin America, where Brazil, Argentina and Puerto Rico were main contributors, and in the Asia/Pacific region, particularly China, Southeast Asia and Australia, with the last benefiting from the new Westpac account.

     Starcom MediaVest Group. Business at Starcom MediaVest Group was also on a very favorable track in the Middle East and in Latin America, with business in Colombia and Venezuela driven by accounts with international clients, as well as in the Asia/Pacific region,

specifically China, India and Southeast Asia. However, business in Australia, continued to suffer from the loss of accounts with the Queensland Government and Woolworth’s in 2003.

     Healthcare. Business in the Asia/Pacific region (Japan and Australia) continued to face stiff competition and revenue declined from 2003.

CONSOLIDATED OPERATIONS — 2003 COMPARED TO 2002

Our Company as a Whole

     Revenue

		Total
		(€ millions)
2002 (as published)			2,926
2002 Pro-forma revenue including Bcom3 for the entire year			4,280
Components of revenue changes (excluding organic growth):
Impact of exchange rate changes			(491	)
Changes in scope of consolidation			(1	)
2002 Revenue at comparable exchange rates and scope of consolidation			3,788
Organic growth(1)			75
2003			3,863

     Our revenue for 2003 came to €3,863 million, an increase of 32.0% from the €2,926 million generated in 2002. This increase was primarily due to the inclusion of a full year of results from Bcom3 (which was consolidated over one quarter and five days in 2002), partially offset by the negative effects of changes in exchange rates. The bulk (70%) of the exchange rate effect resulted from the rise of the euro against the dollar. Organic growth was 2%, reflecting stronger results, mostly in the second half of the year, in North America, the Asia/Pacific region, Latin America, Africa and the Middle East. Growth in those areas more than offset continued contraction in Europe.

     Expenses

     Total operating expenses rose 33.1% to €3.2 billion from €2.4 billion in 2002. As a percentage of revenue, expenses rose from 81.8% in 2002 to 82.5% in 2003. This increase primarily reflected a rise in payroll expenses from 56.7% to 58.3%, which can be explained by (i) the fact that in 2002, Bcom3 was consolidated only for what is typically its most profitable quarter and therefore contributed to an improved personnel cost ratio and (ii) the addition of payroll expenses relating to temporary and free-lance employees (which had previously been classified as “other operating expenses”). The latter change also contributed to a reduction in other operating expenses, which fell from 25.1% of revenue to 24.1% of revenue in 2003, although the effect of cost savings from the continuing integration of Bcom3 played a larger role.

     Depreciation and Amortization

     Depreciation and amortization on all assets other than goodwill rose from €104 million in 2002 to €124 million in 2003, as a result of the consolidation of Bcom3 for the full year.

     Operating Income

     For the reasons stated above, our operating income before depreciation and amortization rose 27% to €677 million in 2003. Operating income before amortization of acquisition-related intangibles rose from €429 million to €553 million and overall operating income increased from €405 million to €522 million. Operating margin, which we define as operating income before amortization of acquisition-related intangibles divided by revenue, fell slightly from 14.7% to 14.3%. This decline resulted from the fact that, in 2002, Bcom3 was consolidated only for what is typically its most profitable quarter.

     Financial Income/Expense

     We incurred net financial expense of €60 million in 2003, up from €28 million in 2002. This increase reflects primarily (i) an increase in indebtedness, (ii) the inclusion of interest payments on our ORANE bonds, which had previously been treated as dividend payments (see note 2.2 to our consolidated financial statements for a description of those bonds), and (iii) the full year effect of interest on discounted Bcom3 property lease provisions.

     Exceptional Income/Charge

     Exceptional items represented a net charge of €7 million in 2003, up from a charge of €3 million in 2002. The 2003 charge resulted from capital losses incurred in connection with asset sales (€2 million) and write-downs relating to discontinued operations (€5 million).

     Income Tax

     We incurred income tax of €172 million in 2003, up from €132 million in 2002. The effective tax rate came to 37.8%, compared to 35.3% in 2002. This increase was caused by interest payments on our ORANE bonds as well as the fact that an increased proportion of our revenue was generated in countries with relatively high corporate taxes, in particular the U.S.

     Income from Companies Accounted for by the Equity Method

     There was no material change in our interest in the income of affiliates accounted for by the equity method (€4 million in 2003 compared to €3 million in 2002).

     Goodwill Amortization

     Amortization of goodwill amounted to €113 million in 2003, up from €69 million in 2002, due primarily to the acquisition of Bcom3.

     Minority Interests

     Minority interests in income fell from €29 million in 2002 to €24 million in 2003, due primarily to our acquisition of all of the stock of ZenithOptimedia Group and Starcom Motive we did not previously own.

     Net Income and Earnings Per Share

     For the reasons stated above, consolidated net income amounted to €150 million, up from €147 million in 2002. Net earnings per share came to €0.82, down from €0.99 in 2002.

By Geographical Area

     Europe

     In France, market conditions continued to be unfavorable throughout the year. Although group revenue rose, this was due primarily to the Bcom3 acquisition. Our existing operations reported negative revenue growth due to weak results from our advertising, media sales and marketing services operations.

     Revenue from the rest of Europe increased also as the result of the Bcom3 acquisition. As in France, revenue growth from existing operations was negative, due to challenging market conditions.

     The Publicis Worldwide network experienced difficulties early in the year in a number of countries, including Germany, Switzerland, Italy and Spain, but achieved significant improvements in those markets as the year progressed. Growth was satisfactory in the U.K. through-out the year. Poor economic conditions, however, led to negative revenue growth in the Netherlands and Scandinavia.

     The Leo Burnett Worldwide network experienced difficulties in the region in 2003, in part due to the problems faced by Fiat, one of its major clients. In addition, market conditions were poor in Scandinavia and, until the end of the year, in Italy and Spain as well.

     Saatchi & Saatchi also had a difficult year in the region. The London office lost accounts with the British Army and Sony and its German operations faced the loss of an account with Commerzbank. Saatchi & Saatchi’s winning of a new account with the Bel Group, however, improves its outlook in the region for 2004.

     Our media services operations reported mixed results, with positive showings in some countries, such as Spain, the U.K. and Russia, and declines in others, such as Germany and Italy.

     North America

     In North America, our revenue was €1,737 million, up 34.1% from €1,295 million in 2002. This increase was caused primarily by the inclusion of a full year of results from Bcom3, although improving market conditions contributed as well.

     The Publicis Worldwide network’s operations benefited from the Hewlett-Packard/Compaq account won in 2002 as well as from accounts (including Procter & Gamble and Heineken) transferred by D’Arcy, a network we dissolved during the year. These accounts more than made up for losses of accounts with Ciba Vision and TGI Friday.

     Leo Burnett suffered the full effect of the loss of the USPS account in 2002, as well as losses in 2003 of accounts with Delta Airlines and Polaroid. However, these losses were almost

completely offset by increased spending from existing clients. Moreover, we expect that accounts with new clients, including Gateway Computers, ConAgra/Healthy Choice, Wella and McDonald’s/Big Mac, will offset the effect of accounts lost late in 2003, in particular Philips. Saatchi & Saatchi had positive growth in the region in 2003, mostly due to increased spending from major clients such as Toyota, General Mills and Procter & Gamble. Saatchi & Saatchi’s outlook for 2004, however, may be adversely affected by the loss of its U.S. account with Johnson & Johnson/Tylenol, Pepcid, Saint Joseph Aspirin and Mylanta at the end of 2003.

     Fallon resumed growth after a difficult year in 2002, winning accounts with clients including Virgin Mobile. Kaplan Thaler generated strong revenue growth as well.

     Our media services operations also reported gains, as the effects of lost accounts (including those with Burger King, Denny’s and Exxon Mobil) were more than offset by increased spending from other clients (including GM, Procter & Gamble, Kraft and Allstate), improved market conditions and gains from clients added in 2002, especially Miramax. Starcom MediaVest’s Diversified Services Group, which provides a variety of marketing services, reported significant growth.

     On the other hand, a number of SAMS units, including the Publicis Healthcare Communications Group and Frankel, had disappointing years, due in part to the management time and attention required to be invested in the process of restructuring and rationalizing those operations.

     Rest of World

     In the rest of the world, our revenue was €583 million, up from €388 million in 2002. Although this was primarily due to the Bcom3 acquisition, improving market conditions in a number of regions also had an impact.

     For Publicis Worldwide, revenue growth was strong across most of Latin America. The primary exception was Brazil, which suffered poor economic conditions throughout most of the year, though some improvement was evident in the fourth quarter. Growth in Australia/Southeast Asia, Malaysia and Singapore more than offset disappointing performances in China, Thailand, Taiwan and Korea.

     Leo Burnett generated strong growth in a number of markets, especially in the Asia/Pacific region (despite the continuing effects of its loss of the Woolworth’s account in Australia), the Middle East and Latin America (except Venezuela). Saatchi & Saatchi reported significant revenue growth, also due to improving conditions in Latin America and the Asia/Pacific region.

     Our media services operations reported gains throughout Asia, but reported little growth in South America, despite the effects of the BellSouth contract.

LIQUIDITY

     We meet our need for liquidity primarily through a combination of cash generated from operations and bank loans.

     Net cash flow from operating activities reflects funds generated from operations and changes in operating assets and liabilities. Net cash from operating activities was €770 million in 2004, up from 559 million in 2003. This increase reflected the restructuring charges relating to the integration of Bcom3 more than offset by a reduction of our working capital requirement resulting from our “focus on cash” program.

     Net cash flow from investing activities includes acquisitions and divestitures of intangible and tangible assets, acquisitions of businesses, investments in companies accounted for using the equity method and net differences in other investments and marketable securities. Net cash used in investing activities was a generation of €255 million in 2004, as compared to the use of €677 million in 2003. The improvement is largely attributable to the proceeds received in 2004 (€487 million) in connection with the sale of the CLN purchased in 2003 for €380 million. In addition, cash used for acquisitions (net of cash from disposals) decreased from €200 million in 2003 to €124 million in 2004, primarily as a result of buyout payments.

     Net cash flow from financing activities includes dividends, changes in debt position and share repurchase programs. Net cash used in financing activities were €927 million in 2004, compared to net cash provided by financing activities of €450 million in 2003. Net cash used in 2004 resulted largely from the redemption of the bond components of the OBSA for an amount of €558 million and from the IPG exchangeable bonds for an amount of €193 million. In 2003, the net cash provided by financing activities was due to an increase in indebtedness.

     There are no significant legal or economic restrictions on the ability of our subsidiaries to transfer funds to us in the form of dividends, loans or advances.

     Currently unused sources of liquidity include short-term bank facilities and a one billion five-year syndicated credit facility. We expect that we will be able to satisfy our cash requirements for the next 12 months from cash flow generated by operations and these sources of funds. With respect to acquisitions made in the ordinary course of our business, our general policy is to avoid dilution of existing shareholders by using cash or treasury shares to make acquisitions, although we may incur some additional indebtedness in connection with acquisitions.

CAPITAL RESOURCES AND INDEBTEDNESS

     As of December 31, 2004, we had total outstanding financial indebtedness of €1,960 million (compared to €3,188 million as of December 31, 2003). This indebtedness was comprised of the following: €7 million in obligations under our 2% notes due 2007, €929 million in obligations under our 1.0% notes due 2018 (including €239 million in redemption premium), €672 million in obligations under our 0.75% notes due 2008, €29 million in bank loans, €172 million of bank overdrafts, €139 million in capitalized lease obligations and €12 million in accrued interest. Net financial indebtedness was €563 million, a figure calculated by subtracting from the total (i) €202 million of the redemption premium noted above, (ii) €67 million in marketable securities and (iv) €1,128 million in cash and cash equivalents. See “Quantitative and Qualitative Disclosures About Market Risk” for a summary of the maturity, currency and interest rate structure of our indebtedness and for information concerning our use of financial instruments for hedging purposes.

     As described under “Information on the Company — Business Overview — Seasonality,” we often generate greater revenue in the second and fourth quarters of the year than we do in the first and third quarters. As a result, our financing needs are sometimes greater in the first and third quarters.

COMMITMENTS FOR CAPITAL EXPENDITURES

     As of December 31, 2004, we had no material commitments for capital expenditures other than those relating to earn-out provisions, pursuant to which we may be required to pay former owners of acquired companies a maximum of €90 million. We intend to finance these expenditures through cash from operations and, if necessary, additional bank loans.

RESEARCH AND DEVELOPMENT

     As described under “Information on the Company — Services and Business Structure — Research Programs,” we have a variety of programs designed primarily to use psychological, anthropological and other methods to assess and enhance the efficiency of our advertising and communications services. In addition, we have developed a number of systems that use advanced technology to address clients’ needs, including Siren Technologies, an in-store updateable digital signage system, and BrandGuard, an integrated on-line marketing and communications system designed to enhance clients’ control of their brand assets.

OFF-BALANCE SHEET COMMITMENTS

     Commitments presented below are gross amounts that have not been discounted to present value.

						Falling due
Contractual commitments						Less than				One to five				More than
Millions of euros		Total				one year				years				five years
Commitments given
Operating lease commitments			1,375				237				816				322
Commitments and options to purchase minority interests			79				37				40				2
Commitments to sell investments			8				8				—				—
Guarantees (1)			272				209				35				28
Total			1,734				491				891				352

Commitments and options to purchase minority interests

     Commitments and options to purchase minority interests have been estimated at the balance sheet date on the basis of contractual clauses and the latest available data. Commitments to purchase minority interests are monitored centrally and are valued on the basis of contractual clauses and projections in respect of the relevant data over the period of the contract.

Guarantees

     These principally comprise:

	•		a guarantee given to a bank in an amount of 88 million euros, as owner of a 45% shareholding in a company called iSe (International Sports & Entertainment AG), which is committed to paying a total of 176 million euros in January 2005, for the acquisition of a license from FIFA;
	•		guarantees given to various banks in an amount of 113 million euros in respect of future media space buying transactions on behalf of the Group’s clients; and
	•		guarantees of payment of property taxes and charges relating to the Leo Burnett building in Chicago, for a total amount of 71 million euros over the period up to 2012.

     The maturity schedule in respect of financial indebtedness and finance lease indebtedness is set out in note 23 to our consolidated financial statements.

						Following due
Other commercial commitments						Less than				One to five				More than
Millions of euros		Total				one year				years				five years
Commitments received
Unutilized credit lines (1)			1,476				1,476								—
Commitments given
Other commercial commitments			—				—				—				—
Total			1,476				1,476				—				--

Commitments related to bonds and to ORANEs

Bond convertible into Interpublic Group (IPG) shares — 2% January 2007

     The terms of this bond provide, since June 30, 2003, the option for bearers to request the exchange of their bonds for a number of shares of Interpublic Group representing a premium of 30% over the reference price (being a conversion price of 36.74 USD), on the basis of 244.3 shares per bond.

     However, following the exercise of the “put option” in February 2004, only 750 convertible bonds remain in circulation at December 31, 2004. Publicis could thus be required, in case of a request for exchange, to deliver a maximum of 183,223 Interpublic Group shares in redemption of the bond.

OCEANE 2018 — 2.75% actuarial January 2018

     With respect to the OCEANEs, bondholders may request that bonds be converted, at the rate of one share for each bond (which bonds had a unit value of 39.15 euros on issue), at any time after January 18, 2002 until the seventh business day before the maturity date (January 2018). Publicis therefore has a commitment to deliver, if requests for conversion are made, 17,624,521 shares which may, at Publicis’ discretion, be either new shares to be issued or existing shares held in its portfolio.

     In addition, the bondholders have the possibility of requesting early redemption in cash, of all or part of the bonds they own, on January 18 in 2006, 2010, and 2014. The early redemption price is calculated in such a way as to provide a gross annual actuarial yield on the bond of 2.75% at the date of redemption.

OCEANE 2008 — 0.75% July 2008

     With respect to the OCEANEs, the bondholders may request that bonds be converted, at the rate of one share for each bond (with a value of 29 euros on issue), at any time after August 26, 2003 until the seventh business day before the maturity date (July 2008). Publicis therefore has a commitment to deliver 23,172,413 shares which may, at Publicis’ discretion, be either new shares to be issued or existing shares held in its portfolio.

ORANEs — Bonds redeemable in new or existing shares — September 2022

     Each ORANE gives a right to receive 18 new or existing Publicis shares, at the rate of one share per year, over the period from September 1, 2005 until the twentieth anniversary of issuance of the bond (2022). Publicis therefore has the obligation to deliver 1,562,500 shares each year from 2005 to 2022, being a total of 28,125,000 shares, which may, at Publicis’ discretion, be either new shares to be issued or existing shares held in its portfolio.

Equity warrants

     The exercise of the equity warrants, which could occur at any time between September 24, 2013 and September 24, 2022 — would lead to an increase in Publicis’ capital stock. At a maximum, Publicis is committed to issuing (in the case where all equity warrants were to be exercised) 28,125,000 shares with a par value of 0.40 euros and a premium of 30.1 euros.

     It should be noted that at December 31, 2004 no material commitment such as a pledge, a guarantee or a mortgage or other security over assets, nor any other material off-balance sheet commitment as defined by current accounting standards, exists.

CONTRACTUAL OBLIGATIONS

     The following table summarizes our estimates of amounts due pursuant to contractual obligations to which we were subject as of December 31, 2004.

		Payments Due by Period
																		More
						Less than												than
Contractual Obligations		Total				1 Year				1-3 Years				3-5 Years				5 Years
		(In millions of euros)
Long-Term Debt Obligations(1)			1,821				220				0				672				929
Capital (Finance) Lease Obligations			139				0				0				0				139
Operating Lease Obligations			1,375				237				435				381				322
Purchase Obligations(2)			79				37				25				15				2
Other Long-Term Liabilities Reflected on the Balance Sheet under French GAAP(3)			90				16				35				8				31
Total			3,504				510				495				1,076				1,423

TRANSITION TO IFRS ACCOUNTING STANDARDS

     The consolidated accounts of Publicis, as required by European law, must be presented in accordance with International Financial and Reporting Standards (“IFRS”) as from January 1, 2005, with comparative information shown for 2004. With the final adoption in April 2005 of new SEC regulations regarding the periods to be presented under a comprehensive set of GAAP which allow foreign private issuers such as our company to include only two years of audited consolidated financial statements for their first year of reporting under IFRS, we intend to select January 1, 2004 as our transition date to IFRS and will therefore present restated 2004 and 2005 IFRS consolidated financial statements in our Form 20-F for the period ending December 31, 2005 and continue to report under French GAAP as primary GAAP for 2004. As from January 2004, under the guidance of Group financial management, Publicis created IFRS impact task forces, whose objective was to identify the principal accounting differences and to prepare the opening balance sheet at January 1, 2004, in accordance with the rules applicable in 2005. The amounts of the principal adjustments to the opening consolidated IFRS balance sheet, at January 1, 2004, and on the consolidated financial statements for the year ended December 31, 2004, have been calculated; however the process of exhaustively identifying all differences with current standards is currently being finalized. The opening consolidated IFRS balance sheet, and a pro-forma consolidated income statement and balance sheet for 2004 prepared under IFRS standards, have been published just before the publication of Publicis’ interim report for the six months ended June 30, 2005.

     It should be noted that the work performed has been on the basis of the IFRS standards and interpretations published to date. Future changes in IFRS texts and the finalization of implementation of the standards within Publicis could require additional adjustments.

     Taking account of the above, the results of work performed as of June 2005 are as follows:

•

In the context of first time adoption of IFRS (options envisaged under IFRS 1), the following policies have been retained by Publicis for the opening balance sheet:

•

Business combinations completed before January 1, 2004, particularly the acquisition of Saatchi & Saatchi, which was treated in accordance with the authorized alternative method under article 215 in French GAAP, have not been retrospectively restated;

	•		Revaluation to market value at January 1, 2004 of the Publicis building situated at 133 avenue des Champs Elysées in Paris, this value being set permanently as the new historical cost;
	•		Application of the accounting treatment applicable to stock options for plans put in place after November 7, 2002;
	•		Application of financial instruments standards as of January 1, 2004;
	•		Recognition of all actuarial gains and losses on pension commitments by deduction from shareholders’ equity; and
	•		Transfer of foreign currency translation adjustments included in opening shareholders equity to an “other reserves” account caption.

•

The main adjustments identified to Publicis’ consolidated accounts are as follows:

	•		Financial instruments: breakdown of bonds which are convertible or reimbursable in shares into their components;
	•		The fair value of the debt component is determined at the date of issuance through discounting future cash flows using a market interest rate for a loan with similar characteristics but without the conversion option. The value of the conversion option, which is calculated as the difference between the fair value of the instrument as a whole and the fair value of the debt component, is reclassified to shareholders’ equity;
	•		The impact on results is the difference between the market rate retained and the contractual actuarial rate.

•

Financial instruments: Interpublic Group (“IPG”) shares:

•

IPG shares are valued in the opening balance sheet and subsequent balance sheets at their fair value (per the stock market). Future changes in fair value are taken to shareholders’ equity.

•

Financial instruments: foreign exchange hedging instruments

•

The fair value of hedging instruments held in respect of third party receivables and payables and of forecast flows is recognized in the balance sheet. The double entry is recorded:

	•		In the income statement for fair value hedges. The effect on the income statement is cancelled by the revaluation of the hedged item;
	•		In a specific account caption in shareholders equity for hedges in respect of forecast flows (cash flow hedges). The amount initially

recognized in shareholders’ equity is taken to the income statement when the hedged flows occur.

•

Financial instruments: commitments to acquire minority interests

•

These commitments must be recognized in other liabilities in the balance sheet when the Group is committed to making the acquisition.

•

Financial instruments: CLN

•

Consolidation of the entity that issued the CLN, which was effective under French standards as from January 1, 2004, did not include recognition of the associated derivatives (asset swap and credit default swap). Under IFRS, the asset swap and the credit default swap are recognized at fair value on the balance sheet, with changes in fair value being taken to the income statement.

•

Stock options:

•

The fair value of options granted, determined at the date of the grant, is amortized through the income statement over the vesting period of the options.

•

Goodwill:

•

Goodwill is no longer amortized but, rather, is subject to annual impairment tests.

•

Income taxes — tax loss carryforwards of acquired companies:

•

The tax advantage arising from use of tax losses of acquired companies (which arose in periods prior to acquisition) is neutralized by a reduction of goodwill of equal amount.

•

The calculation of earnings per share is considerably modified:

•

The denominator takes account, for both basic and diluted earnings per share, of the average number of shares in issue, increased by the number of future shares to be issued under instruments in respect of which future conversion is obligatory (ORANEs).

•

The presentation of the consolidated financial statements will be significantly modified under IFRS:

•

Income statement:

•

Goodwill impairment expense (previously presented after net income of consolidated companies) is henceforth included at the operating

			income level. The same applies to exceptional items, notably capital gains and losses on disposal;
	•		Interest expense related to discounting of pension and other post employment benefit commitments are no longer recognized in personnel costs but, rather, are included in financial costs.

•

Balance sheet:

•

Balance sheet presentation will need to be changed to separately show current and non-current items (notably in respect of the provisions for contingencies and charges caption) and to separately present deferred tax assets and liabilities.

•

Segment information:

•

The Group performed an analysis of the entities presented in its internal reporting in order to determine whether such entities constituted business segments to be disclosed separately. It appears, after regrouping services under a number of criteria (nature of products or services, production processes, type or category of clients, methods of distribution and supply of services, nature of regulatory environment), that the different activities identified do not present any significant divergences in terms of either profitability or risk.

     In view of this analysis, and after taking account of practices in the sector, the Group considers that it operates in a single segment, being “Communications.”

     Lastly, as regards the information systems environment in the context of the IFRS changeover project, work is in progress.

SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN
FRENCH GAAP AND U.S. GAAP

RESTATEMENT

     Impairment of goodwill

     As it relates to the application of SFAS No.142 “Goodwill and Other Intangible Assets,” Publicis historically considered that its brands represents components, as that term is defined by paragraph 30 of SFAS No.142 and further concluded that those components (brands) could be aggregated in accordance with paragraph 30 of SFAS No 142 and the guidance of EITF Topic D-101 “Clarification of Reporting Unit Guidance in Paragraph 30 of SFAS 142.” Accordingly, the Group concluded that it had two reporting units for purposes of goodwill impairment testing.

     In December 2005, Publicis revised its determination of operating segments in accordance with U.S. GAAP. Upon revision of its historical policy, Publicis identified eight operating segments, seven of them are based on brands and the eighth segment is for Corporate and other activities. Each of Publicis’ operating segments corresponding to brands is further

segregated on the basis of geography, with each of the geographies within a brand constituting a component for purposes of SFAS N° 142. Each of those components meets the criteria set forth in paragraph 30 of SFAS 142 as clarified by EITF Topic D-101 for aggregation and, accordingly, Publicis has determined that each of its eight operating segments represents a reporting unit for purposes of goodwill impairment testing in accordance with SFAS 142.

     The revision to its historical policy described above and related impacts of goodwill impairment tests causes Publicis to record, under U.S. GAAP, a goodwill impairment charge related to Leo Burnett for the year ended December 31, 2003 in the amount of €847 million.

     Cumulative translation adjustments

     In addition, Publicis noted that the incremental goodwill and intangible assets that it recorded for U.S. GAAP purposes in connection with the acquisition of Bcom3 and Saatchi & Saatchi were not previously accounted for in the functional currency of the related subsidiary. The Group computed the effect on goodwill, intangible assets, cumulative translation adjustments and amortization expense as of December 31, 2002, 2003 and 2004, as if the incremental goodwill and intangible assets had been properly accounted for in the functional currency of the related subsidiary and after giving consideration to the impairment charge described above.

Impact of the restatement

The following tables summarize the impact of all these adjustments on previously reported amortization expense, operating income, net income, earning per share, assets and shareholders’ equity for consolidated financial statements ended December 31, 2002, 2003 and 2004.

		For the year ended December 31, 2002
(€ millions)		As previously				Impact of				Restated
		reported				restatement
Amortization expense			(158	)			1				(157	)
Operating income			352				1				353
Net income (loss)			(14	)			1				(13	)
Earnings per share (Diluted)			(0.10	)			0.01				(0.09	)
Earnings per share (Basic)			(0.10	)			0.01				(0.09	)

		December 31, 2002
(€ millions)		As previously				Impact of				Restated
		reported				restatement
Goodwill, net			5,422				(57	)			5,365
Intangible asset, net			1,950				(35	)			1,915
Total assets			14,367				(91	)			14,276
Shareholders’ equity			3,846				(91	)			3,755

		For the year ended December 31, 2003
(€ millions)		As previously				Impact of				Restated
		reported				restatement
Amortization expense			(196	)			(845	)			(1,041	)
Operating income			347				(845	)			(498	)
Net income			155				(845	)			(690	)
Earnings per share (Diluted)			0.78				N/A				(3.77	)
Earnings per share (Basic)			0.85				(4.62	)			(3.77	)

		December 31, 2003
(€ millions)		As previously				Impact of				Restated
		reported				restatement
Goodwill, net			5,214				(991	)			4,223
Intangible assets, net			1,671				(28	)			1,643
Total assets			14,241				(1,019	)			13,222
Shareholders’ equity			3,403				(1,019	)			2,384

		For the year ended December 31, 2004
(€ millions)		As previously				Impact of				Restated
		reported				restatement
Amortization expense			(303	)			3				(300	)
Operating income			399				3				402
Net income			343				3				346
Earnings per share (Diluted)			1.36				0.02				1.38
Earnings per share (Basic)			1.88				0.02				1.90

		December 31, 2004
(€ millions)		As previously				Impact of				Restated
		reported				restatement
Goodwill, net			5,315				(1,034	)			4,281
Intangible assets, net			1,464				(52	)			1,412
Total assets			13,231				(1,086	)			12,145
Shareholders’ equity			3,570				(1,086	)			2,484

     Our consolidated financial statements are prepared in accordance with French GAAP, which differ in certain significant respects from U.S. GAAP. As a result, under U.S. GAAP, our net income (loss) amounted to €346 (restated) million in 2004, € (690) (restated) million in 2003 and € (13) (restated) million in 2002, compared to €210 million, €150 million and €147 million,

respectively, under French GAAP. Under U.S. GAAP, shareholders’ equity amounted to €2,484 (restated) at December 31, 2004, €2,384 (restated) million at December 31, 2003, €3,755 (restated) million at December 31, 2002, compared to €881, €726 million and €1,501 million, respectively, under French GAAP.

     The differences between French GAAP and U.S. GAAP are more fully described in note 31 to our consolidated financial statements. In terms of their effect on our net income, the differences consist mainly of:

•

The amortization of tangible assets, intangible assets related to the business combination with Saatchi & Saatchi, which was treated as a purchase under U.S. GAAP but was accounted for using the alternative method under French GAAP (which is similar to the pooling of interests method formerly available under U.S. GAAP). The amortization expense of tangible and intangible assets related to the Saatchi & Saatchi business combination amount to €29 (restated) million, €31 (restated) million and €35 (restated) million in 2004, 2003 and 2002, respectively;

•

The change in contingent value rights issued in connection with the business combination with Saatchi & Saatchi, which is recognized in earnings under U.S. GAAP and resulted in a charge of nil in 2004 and 2003 and €31 million in 2002; under French GAAP, those rights were not recorded as a liability until December 31, 2001;

•

Restructuring charges capitalized as part of net assets acquired for certain business combinations that are disallowed and charged to expense under U.S. GAAP amounted to nil, €129 million and €10 million in 2004, 2003 and 2002 respectively;

•

Changes in the fair values of certain embedded derivatives inherent in our 2.0% notes due 2007 which are recognized in earnings under U.S. GAAP, but are considered to be off-balance sheet commitments under French GAAP;

•

In accordance with the adoption of SFAS 142, as a result of the transitional impairment test, the net impairment charge of €160 million recorded in 2002 as a “Cumulative effect of accounting change” on the consolidated statement of operations to write down the carrying value of intangibles with indefinite useful lives to their fair values;

•

In accordance with SFAS 142, the incremental goodwill recognized under U.S. GAAP in connection with the Bcom3 acquisition has been impaired as of December 31, 2003 for a total amount of €847 million.

•

The reversal of goodwill amortization expense recorded under French GAAP, as goodwill is no longer amortized under U.S. GAAP but reviewed annually for impairment. The goodwill amortization reversal in 2004, 2003 and 2002 amounted to €188 million, €113 million and €75 million, respectively;

•

Compensation arrangements related to acquisitions, which were recorded using the purchase accounting method in our consolidated financial statements in French GAAP and are recorded as compensation expense when incurred under U.S. GAAP;

•

The consolidation of the entity that issued the credit linked notes; the entity is not consolidated under French GAAP, due to the absence of an interest in the entity’s capital as of December 31, 2003, but is considered a variable interest entity subject to consolidation under U.S. GAAP. The derivatives were fair valued with difference in fair value recognized in the statement of income under U.S. GAAP. Under French GAAP, the derivatives were accounted as off-balance sheet commitments. As of January 1, 2004, the entity has been consolidated under French GAAP, but the derivatives continue to be accounted for as off-balance sheet commitments; and

•

The reversal of the interest income recorded through the amortization of equity warrants classified as long-term debt in accordance with French GAAP, but classified as paid-in capital under U.S. GAAP.

     In addition, classification differences between French GAAP and U.S. GAAP give rise to differences in operating income, relating in particular to the amortization of goodwill.

     The differences between French GAAP and U.S. GAAP in terms of their effect on shareholders’ equity at December 31, 2004, 2003, and 2002 relate primarily to:

•

The accounting for the business combination with Saatchi & Saatchi, which was treated as a purchase under U.S. GAAP but was accounted for using the derogatory method under French GAAP;

•

The valuation of marketable securities, which are recorded at fair value under U.S. GAAP and historical cost under French GAAP;

•

The impact of goodwill related to an acquisition in 1993 written-off to shareholders’ equity under previous French accounting guidance;

•

The difference in purchase price for the business combination with Bcom3 (i.e., at fair value of the securities issued in the exchange as of the date of announcement of the acquisition under U.S. GAAP, but as of the date of acquisition under French GAAP);

•

The accounting for Bcom3’s 1997 sale-leaseback transaction, which is treated as a financing lease under U.S. GAAP with the building and the related financing obligation reflected at fair value at the acquisition date, but treated as a capital lease under French GAAP with the related assets capitalized at their fair value at the acquisition date but only for the portion of the building leased back by Bcom3 and the related debt consisting of the present value of the minimum lease payments;

•

The reversal of accumulated amortization expenses on goodwill, as under U.S. GAAP, goodwill are no longer amortized but tested for impairment annually;

•

The formation of ZenithOptimedia Group, the assets of which were revalued under French GAAP in 2002 and 2001 but were written up to fair value under U.S. GAAP in 2000;

•

The fact that under U.S. GAAP, treasury shares are deducted from shareholders’ equity at the amount at which they were repurchased, while under French GAAP, they are recorded as an investment if they are reserved for issuance upon the exercise of stock options; and

•

The minimum pension liability adjustment, not recognized under French GAAP.

CRITICAL ACCOUNTING POLICIES UNDER U.S. GAAP

     In addition to the accounting methods described in “— Basis of Presentation — Critical Accounting Policies,” we believe that the application of the following U.S. critical accounting policies, which differ from those used for French GAAP, requires reliance upon significant judgments, estimates and assumptions. We believe that, of our significant accounting policies, the following involve the greatest degree of judgment and complexity, and are therefore most likely to affect our net income under U.S. GAAP materially if various assumptions were changed significantly.

     Goodwill and Intangible Assets

     Goodwill has been calculated under U.S. GAAP by comparing the fair value of the identifiable assets acquired with the fair value of the consideration, including associated transaction costs. Until 2002, such goodwill was amortized over 40 years. Effective January 1, 2002, goodwill and intangible assets deemed to have indefinite lives are no longer amortized but are subject to annual impairment tests due to our adoption of Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). Intangible assets with a definite life continue to be amortized over their useful lives and are tested for impairment whenever events or circumstances indicate that a carrying amount of an asset (asset group) may not be recoverable. See “Summary of Significant Differences between French GAAP and U.S. GAAP — Restatement — Impairment of Goodwill” for a discussion of goodwill impairment effective with this filing.

     The fair value of reporting units and intangible assets with an indefinite life is determined using the discounted cash-flows method and future cash flows are taken from the most recent business plans approved by management. Actual earnings may differ from our estimates. Financial assumptions are adjusted to reflect the specific characteristics of the assets concerned at prevailing market conditions:

–

Discount rates of between 8% and 10% in 2004; 8.5% and 11% in 2003 and 9% and 11.5% in 2002,

–

Revenue growth not exceeding 3% (excluding inflation) and terminal value growth rates in line with available market data specific to the operating segments concerned.

     Deferred Taxes

     In our French GAAP consolidated financial statements, deferred taxes have not been recognized due to the uncertainty of their recoverability. For U.S. GAAP purposes, deferred tax assets have been recorded and a 100% valuation allowance has been provided because the recoverability of the deferred tax assets was not considered to satisfy the applicable “more likely than not” standard.

     Stock Compensation

     Under U.S. GAAP, we account for stock options using the intrinsic value method prescribed by APB Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), and have adopted the disclosure provisions of SFAS 123, “Accounting for Stock-Based Compensation” (SFAS 123) and other interpretations. When stock options are granted to employees or directors with an exercise price inferior to the fair value of the underlying shares at the date of grant, the resulting premium is immediately reflected in shareholders’ equity. This premium is offset in shareholders’ equity by an equivalent deferred compensation amount. Therefore, there is no impact on total shareholders’ equity. The deferred compensation amount is amortized as compensation expense in the income statement over the vesting period of the options.

NEW ACCOUNTING PRONOUNCEMENTS

     In March 2004, the Emerging Issues Task Force (“EITF”) reached a consensus on EITF 03-1, “The Meaning of Other Than Temporary Impairment and its Application to Certain Investments.” EITF 03-01 contains additional guidance for determining when an investment is impaired. The effective date for applying this guidance is currently suspended pending the issue of a further FASB Staff Position statement. In the opinion of Publicis, adoption of the additional guidance would not have a material effect on the consolidated financial statements.

     In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment (FAS 123R). FAS 123R requires that Publicis recognizes the cost of share-based payments granted to employees measured at the grant-date fair value of the award. Publicis is required to adopt FAS 123R effective January 1, 2006 to all share-based grants made or modified after June 15, 2005 and for the unvested portion of outstanding share-based grants made prior to June 15, 2005. Publicis is currently evaluating the impact of adopting FAS 123R.

     In March 2004, the FASB ratified the consensus reached on EITF Issue No. 03-6, “Participating Securities and the Two-Class Method under FASB Statement No. 128, Earnings Per Share.” EITF 03-6 clarifies what constitutes a participating security and requires the use of the two-class method for computing basic earnings per share when participating securities exist. EITF 03-6 is effective April 1, 2004 and requires retroactive adjustment to earnings per share presented for prior periods. The adoption did not have a material impact on the consolidated financial statements of Publicis.

     In December 2004, the FASB issued SFAS No. 153 “Exchanges of Non-Monetary Assets” as an amendment to APB Opinion No. 29 “Accounting for Non-Monetary Transactions.”

APB 29 prescribes that exchanges of non-monetary transactions should be measured based on the fair value of the assets exchanged, while providing an exception for non-monetary exchanges of similar productive assets. SFAS 153 eliminates the exception provided in APB 29 and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. SFAS 153 is to be applied prospectively and is effective for all non-monetary asset exchanges occurring in fiscal periods beginning after June 15, 2005. Publicis does not expect there to be any material effect on the consolidated financial statements upon adoption of the new standard.

     In May 2005, SFAS No. 154, Accounting Changes and Error Corrections, was issued, which replaces APB Opinion No. 20, Accounting Changes, and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. Among other changes, SFAS No. 154 requires retrospective application of a voluntary change in an accounting principle to prior period financial statements presented on the new accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS No. 154 also requires accounting for a change in method of depreciating or amortizing a long-lived non-financial asset as a change in accounting estimate (prospectively) affected by a change in accounting principle. Further, the statement requires that corrections of errors in previously issued financial statements be termed a “restatement.” The new standard is effective for accounting changes and error corrections made in fiscal years beginning after December 15, 2005. We do not expect the adoption of SFAS No. 154 to have a material impact on our Consolidated Balance Sheet or Statement of Operations.

Item 6. Directors, Senior Management and Employees

DIRECTORS AND SENIOR MANAGEMENT

     We have a two-tier management structure pursuant to which a management board (directoire) manages our day-to-day affairs under the general supervision of a supervisory board (conseil de surveillance), the members of which are elected by shareholders. The members of our management board are also our senior managers. We refer to members of the supervisory board and management board collectively as “directors.”

Supervisory Board

     The supervisory board has the responsibility of exercising whatever ongoing supervisory authority over the management and operations of our company it deems appropriate. Throughout the year it carries out such inspections as it considers appropriate and is given access to any documents it considers necessary. The supervisory board also reviews the annual accounts prepared by the management board and presents a report on those accounts to the shareholders at the annual shareholders’ meeting. It authorizes the management board to take actions related to strategic decisions, including those related to transactions that could substantially affect the scope of our activities and significant agreements. In addition, under French law, the supervisory board holds certain specific powers, including the power to appoint the members of the management board. Our statuts (bylaws) provide that each member is elected by the shareholders at an ordinary general shareholders’ meeting. Members of the

supervisory board can be removed from office by a majority shareholder vote at any time. They meet as often as the interests of our company require. Pursuant to our statuts, each member of the supervisory board must own at least 200 of our shares.

     The following table sets forth, for each member of our supervisory board, the member’s current function in our company and principal business activities outside of our company, the date the member’s current term of office is scheduled to expire and the date the member joined the supervisory board.

Elisabeth Badinter
Initially Appointed		November 1987 (appointed as chairperson of the supervisory board in April 1996)
Expiration Date of Current Term		June 2006
Principal Function in Publicis		Chairperson of the supervisory board and
		Chairperson of the supervisory board of
		Médias & Régies Europe
Principal Business Activities Outside Publicis		Author
Robert Badinter
Initially Appointed		June 1996
Expiration Date of Current Term		June 2008
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		Professor Emeritus, University of Paris
		I (Panthéon-Sorbonne); honorary attorney
Simon Badinter
Initially Appointed		June 1999
Expiration Date of Current Term		June 2011
Principal Function in Publicis		Chairman of the management board and director of international development, Médias & Régies Europe SA (France), Member of supervisory board of Médiavision & Jean Mineur SA (France), Director of Métrobus SA (France), Gestion Omni Media Inc. (Canada) and Omni Media Cleveland Inc. (USA) Chairman and chief executive officer of Médias & Régies America Inc. (USA), and Chairman and chief executive officer of development office of Médias & Régies Europe Inc. (USA)
Principal Business Activities Outside Publicis		None

Monique Bercault
Initially Appointed		June 1998
Expiration Date of Current Term		June 2010
Principal Function in Publicis		Director
		Technical consultant to the chairman of the management board of Médias & Régies Europe SA (France)
Principal Business Activities Outside Publicis		None
Michel Cicurel
Initially Appointed		June 1999
Expiration Date of Current Term		June 2010
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		Chairman of the management board of: La
		Compagnie Financière Edmond de Rothschild Banque SA and Compagnie-Financière Saint-Honoré SA (France)
		Chairman of the board of: ERS SA (France), Edmond de Rothschild SGR (Italy), and Edmond de Rothschild SIM (Italy)
		Chairman of the supervisory board of Edmond de Rothschild Private Equity Partners SAS (France)
		Member of the board of: Banque Privée Edmond de Rothschild (Switzerland),
		Edmond de Rothschild Limited (U.K.), La
		Compagnie Financière Holding Edmond et
		Benjamin de Rothschild (Switzerland), La
		Compagnie de Trésorerie Benjamin de
		Rothschild (Switzerland), Bouygues
		Telecom SA (France), Cdb Web Tech
		(Italy), Cir International (Luxembourg),
		Rexecode (France), and Société Générale
		SA (France)
		Permanent representative of: Compagnie
		Financière Edmond de Rothschild Banque
		(France), Edmond de Rothschild Corporate
		Finance SA (France), Edmond de
		Rothschild Asset Management SA (France),
		Edmond de Rothschild Financial Services
		SA (France), Edmond de Rothschild Multi
		Management SAS (France), and Equity
		Vision SA France and Assurances et
		Conseils Saint-Honoré (France)
		Member of the board of Limited Partners
		of Rothschild & Compagnie Banque SCS
		(France)

		Permanent representative of
		Compagnie-Financière Saint-Honoré on the
		board of Cogifrance SA (France)
		Auditor, Paris-Orléans SA (France)
Michel David-Weill
Initially Appointed		June 1990
Expiration Date of Current Term		June 2008
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		Chairman of Lazard LLC (USA) (until May 2005)
		Chairman and chief executive officer of
		Lazard Frères Banque SA (France) (until
		September 2004)
		Chairman and managing partner of Maison
		Lazard SAS (France) (until May 2005)
		President of Malesherbes SAS (France)
		Chairman of the board of Rue Impériale
		SA (France) (until May 2004)
		Vice-chairman of the board of Groupe
		Danone SA (France)
		Chairperson of the supervisory board of
		Eurazeo SA (France)
		Managing partner of: Lazard Frères SAS
		(France) (until May 2005), Partena SCS
		(France) and Partemiel SNC (France)
		Manager of: Parteman SNC (France), and
		Parteger SNC (France) and BCNA
Sophie Dulac
Initially Appointed		June 1998 (appointed as vice-chairperson
		in June 1999)
Expiration Date of Current Term		June 2010
Principal Function in Publicis		Director, vice-chairperson
Principal Business Activities Outside Publicis		Manager of Sophie Dulac Productions SARL
		(France), and Sophie Dulac Distribution
		SARL (France)
		Chairperson of the board of Les Ecrans
		de Paris SA (France)
		Vice-chairperson of the board of CIM de
		Momarte SA (France)
Yutaka Narita
Initially Appointed		June 2002
Expiration Date of Current Term		June 2008
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		Principal advisor & chairman of Dentsu
		Group, Dentsu Inc.

		Chairman of the Renovation Committee of
		the Tokyo Chamber of Commerce
		President of the Japan Advertising
		Agencies Association
		Chairman of the Japan Audit Bureau of
		Circulation
		Executive director of: FM Japan Ltd.,
		Broadcasting System of Niigata Inc.,
		Nippon Venture Capital Co., Ltd., Tokyo
		Broadcasting System, Inc., Television
		Nishinippon Corporation, and SBC Ltd
		Member of the Foundation Board of the
		Institute for Management Development
		Member of: the French Chamber of
		Commerce and Industry in Japan, and the
		Strategic Council on Attractiveness of
		France
		Trustee of the Japan Association of
		Corporate Executives
		Professor Emeritus, Beijing University
Tateo Mataki
Initially Appointed		September 2004
Expiration Date of Current Term		June 2008
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		President and chief executive officer of
		Dentsu Inc.
		Vice president of Japan Marketing
		Association International Advertising
		Association Japan Chapter
		Organizing Committee for the IAAF World
		Championship in Athletics 2007
		Member of Controlling Committee of Japan
		Advertising Agencies Association
		Member of: the Nippon Academy Award
		Association and The Tokyo Chamber of
		Commerce and Industry
		Representative of Supporting Member of
		the National Federation of UNESCO
		Associations in Japan
		Senior Corporate Advisor to Iwate
		Broadcasting Co., Ltd.
Hélène Ploix
Initially Appointed		June 1998
Expiration Date of Current Term		June 2010

Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		President of: Pechel Industries
		Partenaires SAS, Pechel Industries SAS
		(France), and Pechel Services SAS
		(France)
		Member of the board of Lafarge (France),
		BNP Paribas (France), Boots Group (UK),
		and Ferring (Switzerland)
		Permanent representative of Pechel
		Industries on the boards of
		Aquarelle.com Group SA (France),
		Quinette Gallay SA (France),
		CVBG-Dourthe Kressman SA (France),
		Xiring SA (France), CAE International SA
		(France)
		Manager of Hélène Ploix EURL
Felix George Rohatyn
Initially Appointed		June 2001
Expiration Date of Current Term		June 2007
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		President of Rohatyn Associates LLC (USA)
		Director of: LVMH Moët Hennessy Louis
		Vuitton S.A. (France) and Rothschilds
		Continuation Holdings AG
		Member of supervisory board of Lagardère
		Group S.A. (France)
Robert Seelert
Initially appointed		August 2000
Expiration Date of Current Term		June 2006
Principal Function in Publicis		Director and chairman of Saatchi &
		Saachi Worldwide, Inc. (USA)
		Director and chief executive officer of:
		Saatchi & Saatchi Holdings Worldwide,
		Inc. (USA), Saatchi & Saatchi Compton
		Worldwide, Inc. (USA), Saatchi & Saatchi
		North America, Inc. (USA), and Zenith
		Trustees Limited (USA)
Amaury de Seze
Initially Appointed		June 1998
Expiration Date of Current Term		June 2010
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis
		President of: PAI Partners SAS
		(France), and Financière PAI SAS
		(France)

		Director of: Eiffage SA (France), Erbé
		SA (Belgium), Groupe Bruxelles Lambert
		SA (Belgium), Groupe Industriel Marcel
		Dassault SA (France), Power Corporation
		du Canada Holding Ltd. (Canada),
		Pargesa Holding SA (Switzerland), United
		Biscuits Holdings Ltd. (UK), UGC SA
		(France), and Novalis SAS (France)
		Member of the supervisory board of Gras
		Savoye SCA (France)
Henri-Calixte Suaudeau
Initially Appointed		November 1987
Expiration Date of Current Term		June 2006
Principal Function in Publicis		Director of Publicis Conseil SA (France)
Gérard Worms
Initially Appointed		June 1998
Expiration Date of Current Term		June 2010
Principal Function in Publicis		Director
Principal Business Activities Outside Publicis		Managing partner of: Rothschild et Cie
		Banque (France), and Rothschild et Cie
		SCS (France)
		President of S.G.I.M. SA (France)
		Member of the supervisory board of:
		Métropole Télévision SA (France), Médias
		et Régies Europe SA (France), and
		Paris-Orléans SA (France)
		Director of: Editions Atlas SA
		(France), and Cofide SA (Italy)
		Auditor of: Ondéo Degrémont SA
		(France), and SIACI SA (France)

Business Experience of Supervisory Board Members

     Elisabeth Badinter, born on March 5, 1944, is the daughter of Marcel Bleustein-Blanchet. Ms. Badinter is a philosopher and was a lecturer at the Ecole Polytechnique, and is the author of numerous books. She has been a member of our supervisory board since 1987 and its chair since 1996.

     Robert Badinter, born on March 30, 1928, is the husband of Elisabeth Badinter. Mr. Badinter has served as the president of France’s Constitutional Court. He has also been a practicing attorney. He is now a professor of law at the Paris I University (Panthéon Sorbonne).

     Simon Badinter, born on June 23, 1968, is the son of Elisabeth Badinter and Robert Badinter. Mr. Badinter joined Médias & Régies Europe in 1991. He was appointed chairman and chief executive officer of Médias & Régies Europe in 2004.

     Monique Bercault, born on January 13, 1931, has held a variety of positions with our company since joining us in 1953. In 1972, she was named head of human resources at the predecessor company of Médias & Régies Europe.

     Michel Cicurel, born on September 5, 1947, is currently chair of Compagnie Financière Edmond de Rothschild Banque and Compagnie-Financière Saint-Honoré. He was previously a senior official in the French Treasury Department, after which he served as deputy general manager of Compagnie Bancaire, general manager of Cortal Bank, president of Dumenil-Leble Bank and administrator, general manager and vice president of Cerus.

     Michel David-Weill, born on November 23, 1932, has held a variety of senior positions in the Lazard group, which he joined in 1961. Among other things, he was the chair of Lazard LLC, chairman and chief executive officer of Lazard Frères Banque and chairman and managing partner of Maison Lazard SAS until May 2005. He is also currently vice-chairman and director of the Danone Group.

     Sophie Dulac, born on December 26, 1957, is the niece of Elisabeth Badinter and granddaughter of Marcel Bleustein-Blanchet. Ms. Dulac is the founder and manager of a recruitment counseling company. She has been a member of our supervisory board since 1997 and a vice president of our company since 1999.

     Yutaka Narita, born on September 19, 1929, joined Dentsu in 1953. In 1971, he became director of the newspaper/magazine division and later director of one of Dentsu’s account services divisions. Since he became a member of the Dentsu board of directors in 1981, he served as managing director from 1983-1989 and was subsequently promoted to senior managing director. In 1993 he became the ninth president of Dentsu, and, as of June 27, 2002, he became chairman and chief executive officer of Dentsu. Mr. Narita has been principal advisor and chairman of Dentsu since 2004.

     Tateo Mataki, born on March 2, 1939, has been president and chief executive officer of Dentsu Inc. since 2004. Mr. Mataki joined Dentsu in 1962, where he held several positions until he joined the Dentsu board of directors in 1995 first as managing directors for the Newspaper and Magazines Divisions, then as senior managing director in charge of Account Services. Named executive vice president in 1999, he became the tenth president of Dentsu in 2002.

     Hélène Ploix, born on September 25, 1944, has served as president of the Banque Industrielle et Mobilière Privée, adviser to the French Prime Minister, director of the International Monetary Fund and the World Bank, deputy general manager of the Caisse des Dépôts et Consignations and president of the Caisse Autonome de Refinancement and CDC Participations. She has been president of Pechel Industries since 1997.

     Felix George Rohatyn, born on May 29, 1928, served as the U.S. Ambassador to France from 1997 until 2000. He had previously been a managing director of Lazard Frères and Company. He joined Lazard Frères in 1948 and became a partner there in 1961. From 1968 to 1972, he has also served as a member of the Board of Governors of the New York Stock Exchange. From 1975 to 1993, he was chairman of the Municipal Assistance Corporation of the City of New York.

     Robert Seelert, born on September 1, 1942, worked from 1966 to 1989 for General Foods Corporation, serving as president and chief executive officer of its Worldwide Coffee and International Foods subsidiary from 1986 until 1989. He served as president and chief executive officer of Topco Associates, Inc. from 1989 to 1991 and held the same positions for Kayser Roth Corporation from 1991 to 1994. He became chief executive officer of Cordiant in 1995 and took the same position with Saatchi & Saatchi in 1997. He was appointed chairman of Saatchi & Saatchi in 1999.

     Amaury de Sèze, born on May 7, 1946, has held senior operating and management positions in a number of major companies. He was appointed general manager of Volvo France in 1981 and served as its chairman from 1986 to 1993. From 1990 to 1993, he was also president of Volvo’s European operations, senior vice president of AB Volvo and a member of the executive committee of the Volvo group (AB Volvo). He has served on the boards of the French Postal Service, Schneider, Sema Group, Bruxelles Lambert group, Poliet, Clemessy, Compagnie de Fives Lille and Eiffage, among others.

     Henri-Calixte Suaudeau, born on February 4, 1936, joined our company in 1989 and served as president of our Drugstore subsidiary until 1999. Prior to 1989, he was an estate administrator and real estate valuation consultant for the French court system. He has led our real estate department since 1997.

     Gérard Worms, born on August 1, 1936, began his career as a technical adviser in the French civil service. Beginning in 1972, he held general management positions at the Hachette group, the Rhône Poulenc group and then at Société Générale de Belgique. From 1990 to 1995, he served as chairman and chief executive officer of the Compagnie de Suez and Chair of the Indosuez Bank. From 1995 to 1999, he was chairman of the Conseil des Commanditaires of Rothschild et Cie Banque (Paris).

Management Board

     Under French law, the management board has broad powers to act on behalf of our company to further our corporate purposes, subject to those powers expressly granted by law to the supervisory board and to our shareholders. The management board must obtain the authorization of the supervisory board to enter into certain transactions. However, these restrictions cannot be used to rescind a transaction with a third party who has entered into the transaction in good faith.

     Pursuant to our statuts, the management board must have at least two but no more than five members. Our supervisory board may fill any vacancies on the management board within two months. The supervisory board also appoints one of the members of the management board as chairperson. Under French law, the chairperson of the management board is appointed and may be removed as chairperson (but not as a member of the management board) at any time by the supervisory board with or without cause. A member of our management board may be removed by the shareholders or by the supervisory board. The management board meets as often as the interests of our company require. Under French law, members of the management board must be natural persons, but need not be shareholders of our company. There is no limitation, other than applicable age limits, on the number of terms that a member of the management board may serve.

     The following table sets forth, for each member of our management board, the member’s current function in our company and principal business activities outside of our company, the date the member’s current term of office is scheduled to expire and the date the member joined the management board.

Claudine Bienaimé
Initially Appointed		January 2004
Expiration Date of Current Term		December 2007
Principal Function in Publicis		Director and general secretary
		Director of:
		Publicis Conseil SA (France), Médiasystem
		SA (France), Solange Stricker Associés SA
		(France), Groupe Zenithoptimedia SA
		(France), Publicis Groupe Investissements
		BV (Netherlands), Publicis Holdings BV
		(Netherlands), and Publicis Groupe Holdings
		BV (Netherlands)
		Permanent representative of Publicis
		Conseil SA (France) on the board of:
		Publicis Et Nous SA (France),
		Paname Communication SA (France),
		Carré Noir SA (France), Publicis Dialog SA
		(France), Re: Sources France SAS,
		Loeb & Associés SA (France), Corporate
		Factory SAS (France),
		World Advertising Movies SA (France),
		Publicis Atlantique SA (France),
		Publicis Koufra SA (France),
		Publicis Cachemire SA (France),
		Implication (France),
		2ème Communication SA (France), and
		Sopofam SA (France)
		Manager of Drugstore Champs Elysées SNC
		(France)
		Member of the Management Committee of SFPP
		Holdings SAS (France)
		General Secretary of Publicis Groupe SA
		(France)
Principal Business Activities Outside Publicis		Chief executive officer of Société
		Immobilière du Boisdormant SA (France)
		Acting general director of Rosclodan SA
		(France);

		Director of: Gévelot SA (France), P.C.M.
		Pompes SA (France), Gévelot Extrusion SA
		(France), and Gurtner SA (France)
Jack Klues
Initially Appointed		January 2005
Expiration Date of Term		December 2007
Principal Function in Publicis		Director
		President and director of:
		Starcom Worlwide, Inc. (USA), and
		Starcom Media Vest Group Holdings, Inc.
		(USA)
		Director of:
		Starlink Services, Inc (USA).
		Starcom Worldwide SA (France),
		Starcom Worldwide SA de CV (Mexico), and
		Relay, Inc. (USA),
Principal Business Activities Outside Publicis		Director of Off the Street Club
Maurice Lévy
Initially Appointed		November 1987
Expiration Date of Current Term		December 2007
Principal Function in Publicis		Chairman of the management board,
		Chairman and chief executive officer of
		Publicis Conseil SA (France)
		Chairman, chief executive officer and
		director of Publicis USA Holdings, Inc.
		(USA)
		Member of the supervisory board of Médias &
		Régies Europe SA (France)
		Director of:
		Optimedia Holdings Limited (U.K.),
		Multi Market Services Limited (U.K.),
		Zenith Optimedia Group Limited (U.K.),
		Publicis Communication (Pty) Limited (South
		Africa),
		Publicis Johannesburg (Pty) Limited (South
		Africa),
		Optimedia SA Pty Ltd (South Africa),
		Publicis Communication Pty Limited
		(Australia),
		Publicis Communication Limited (New
		Zealand),
		Publicis Canada Inc. (Canada),

		Publicis-Unitros SA (Chile),
		Publicis Advertising 2000 Limited (Israel),
		Fallon Group, Inc. (USA),
		Publicis & Hal Riney (USA),
		Publicis.Wet Desert Sdn Bhd (Malaysia),
		Publicis Pakistan Pvt (Pakistan),
		Publicis Ad-Link Group Limited (China),
		Publicis Graphics Group Holding SA (Luxembourg),
		Venice Holdings Pty Limited (Australia),
		Mojo Custodians Pty Limited (Australia),
		Omagh Pty Limited (Australia),
		Optimedia Australia Pty Limited (Australia),
		Papagena Pty Limited (Australia),
		Publicis Loyalty Pty Limited (Australia),
		Publicis Mojo Pty Limited (Australia),
		Publicis Dialog Pty Limited (Australia),
		Publicis Mojo Limited (New Zealand),
		A.B. Data Limited (Israel),
		Triangle Holdings Limited (U.K.),
		Philadelphia Merger Corp. (USA), and
		Asia Baseline Holdings, Inc. (Philippines)
		President and director of: U.S. International Holding Company, Inc. (USA), and D’Arcy Masius Benton & Bowles, Inc. (USA)
		Permanent representative of Publicis Groupe SA (France) on the board of Publicis Technology SA (France)
Principal Business Activities Outside Publicis		President of the Palais de Tokyo, site de création contemporaine (French association under law 1901)
Kevin Roberts
Initially Appointed		September 2000
Expiration Date of Current Term		December 2007
Principal Function in Publicis		Director and President of Saatchi & Saatchi Worldwide Inc. (USA)
Principal Business Activities Outside Publicis		Member of the board of: Red Rose Limited (New Zealand), Red Rose Charitable Services
		Limited (New Zealand), Inspiros Worldwide
		Limited (New Zealand), NZ Edge.com Holding
		Limited (New Zealand), Lion Nathan plc
		(U.K.), New Zealand Rugby Football Union
		(U.K.), North Harbour Rugby Football Union
		(U.K.), and Thomson Murray, Inc.