Publicis Groupe Posts Strong Q2s, As Organic Growth Spirals 10.3%

Publicis Groupe has revealed its Q2 2022 overnight, reporting organic growth of 10.3 per cent, with the US up 10.1 per cent, Europe 10.1 per cent and Asia 6.5 per cent.

The Paris-based holding company has increased its 2022 growth forecast to between six and seven per cent and expects an improved operating margin of between 17.5-18 per cent. It says it expects free cash flow of least at €1.5 billion ($A2,2 billion) in 2022.

Highlights of the results included:

Q2 reported growth of +21 per cent
Q2 organic growth at +10.3 per cent after +17.1 per cent in Q2 2021
- Very solid performance across regions, with U.S. at +10.1 per cent, Europe +10.1 per cent, Asia +6.5 per cent
- Further acceleration of Publicis Sapient and Epsilon at +19.1 per cent and +13.7 per cent respectively
Continued momentum in New business with N°1 rank in broker league tables
Increase of Operating margin rate to 17.3 per cent, up 80bps vs. H1 2021
Headline EPS up +29 per cent at €2.88 and Free Cash Flow up +17 per cent at €708m
Upgrade of 2022 guidance: organic growth expected at six to seven per cent, operating margin rate between 17.5 per cent and 18 per cent, Free Cash Flow at least at €1.5bn
Q2 reported growth of +21 per cent
Q2 organic growth at +10.3 per cent after +17.1 per cent in Q2 2021
- Very solid performance across regions, with U.S. at +10.1 per cent, Europe +10.1 per cent, Asia +6.5 per cent
- Further acceleration of Publicis Sapient and Epsilon at +19.1 per cent and +13.7 per cent respectively
Continued momentum in New business with N°1 rank in broker league tables
Increase of Operating margin rate to 17.3 per cent, up 80bps vs. H1 2021
Headline EPS up +29 per cent at €2.88 and Free Cash Flow up +17 per cent at €708m
Upgrade of 2022 guidance: organic growth expected at six to seven per cent, operating margin rate between 17.5 per cent and 18 per cent, Free Cash Flow at least at €1.5bn

Commenting on the numbers, Arthur Sadoun (lead image), chairman and CEO of Publicis Groupe, said: “H1 2022 came in at an all-time high for the Groupe on all KPIs.

“Our reported net revenue growth in the first half was at +19.1 per cent. It was up +10.4 per cent on an organic basis, implying +11.3 per cent on a three-year basis, versus pre-pandemic levels.

“After a strong start to the year, we recorded in Q2 an increase of +21 per cent of our net revenue and an organic growth of +10.3 per cent, way beyond expectations.

“There are three reasons behind this remarkable performance, which comes on top of +17.1 per cent organic growth in Q2 last year. First, very solid growth across all regions, with the U.S and Europe at +10 per cent, and Asia at +6.5 per cent, with China remaining positive despite the lockdowns. Second, further acceleration at Publicis Sapient and Epsilon which grew +19.1 per cent and +13.7 per cent respectively, confirming our ability to capture the shift of client investment towards data, technology and digital business transformation. Last but not least, we benefitted from the ramp-up of our New Business, after a record number of wins in 2021. Our momentum since the beginning of the year continues to place us at the top of the New Business rankings for the past 12 months, in the latest broker reports.

“At the same time, our financial ratios reached new historic heights in the first half of the year thanks to the uniqueness of our operating model. Our margin came in at 17.3 per cent, and headline EPS increased by close to 30 per cent. This performance, combined with our better visibility on a solid H2 and the strength of our model, make us confident for the future. We are therefore upgrading our guidance on all KPIs for 2022, with an organic growth now expected between up six to seven per cent for 2022, an operating margin rate between 17.5 per cent and 18 per cent and a Free Cash Flow at least at 1.5 billion euros.

“Looking ahead, we are ready to face the ongoing uncertainties caused by the macro-economic context, thanks to our unique capabilities to help our clients weather any potential challenges and by leveraging our agile platform organisation to sustain industry-high financial ratios.

“I would like to thank our clients for their trust, and our people for their incredible efforts, which have led us to these extremely strong results,” Sadoun said.

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Arthur Sadoun Publicis Groupe